Individual Savings Accounts
	 — 
	Question

Lord Lee of Trafford: To ask Her Majesty's Government what progress they are making in considering whether shares quoted on the Alternative Investment Market should be eligible for ISAs. In doing so, I declare an interest as an owner of shares in a number of AIM quoted companies.

Lord Sassoon: My Lords, the Government are considering this question and welcome representations from interested parties. They will set out their approach in due course.

Lord Lee of Trafford: I am grateful for that Answer. I had hoped that the noble Lord might achieve instant popularity by giving a rather more positive Answer, but we obviously welcome him with his considerable City experience. At 30 April, 1,250 shares were quoted on the Alternative Investment Market with a total capitalisation of £64 billion. The Stock Exchange believes that capital raising would be much easier if AIM shares were made eligible for ISAs. In broad terms, a decision by the Government would be tax-neutral. Given that shares quoted on the Channel Islands Stock Exchange are eligible for ISAs, does the Minister agree that it is time that the Government changed their decision and gave investors the choice?

Lord Sassoon: I agree with the noble Lord that there are 1,250 companies on AIM, but of those about 750-60 per cent-have a market capitalisation of less than £25 million. I also remind your Lordships that the purpose of the ISA was to hold mainstream products, so there is a tension between the very many smaller companies on AIM and the fundamental purpose of an ISA. The Government have a number of schemes for assisting the capital raising of smaller and medium-sized companies. I have not seen any evidence that it would be materially easier for those companies, albeit that there clearly would be some effect at the margin, if AIM shares were included in ISAs.

Lord Bilimoria: Does the Minister, who I congratulate on his appointment, recognise that this is an anomaly? AIM was set up, I think, under a Conservative Government in the 1990s to encourage investment into small and medium-sized enterprises, into growing companies. Surely the Government realise that we have to encourage that investment. Why should this be disallowed? AIM is a recognised exchange run by the London Stock Exchange. Do the Government not want to encourage investment when growth is desperately needed in the economy?

Lord Sassoon: As has already been pointed out, AIM has been enormously successful, with 1,250 companies listed. The money raised on AIM has helped more than 3,100 companies. Since the start of the market £67 billion has been raised at admission and through further fundraising, which includes more than £16 billion raised by 1,800 smaller UK companies. AIM has been very successful in helping the financing of the smaller and growing market.

Lord Myners: Does the Minister agree that increasing capital gains tax is more likely to decrease innovation, enterprise and job creation than improve them?

Lord Sassoon: I thank the noble Lord for his question and I was wondering when we would get some more of the candour shown in yesterday's remarks. I know that the question of capital gains tax is of interest to many noble Lords. The coalition Government believe that the tax system needs to be reformed to make it fairer and simpler, and that is why we will increase the personal allowance for income tax to help lower and middle income earners. To fund this, we are carefully considering the various options for taxing non-business capital gains at rates closer to those applied to income while ensuring that there are generous exemptions for entrepreneurial business activities. Reforming CGT will ensure that those seeking to avoid paying income tax by converting their income into a capital gain will pay their fair share of tax. Further details on the coalition Government's proposals will be provided at the Budget.

Lord Forsyth of Drumlean: My Lords, in welcoming my noble friend to his new position, could I ask him to look at this again? The noble Lord, Lord Myners, indicated in the last Parliament that this issue was the subject of a review and that we might get a response in due course. How long is "in due course"? Does not my noble friend agree that small and medium-sized businesses are the key to expanding prosperity and jobs in our country, so making this small change-which as the noble Lord said is an anomaly-will open up the possibility of investors being able to invest, and "all being in this together", to create a recovery in our country? Surely we need a response.

Lord Sassoon: First, I regret that I cannot say why the previous Government made no progress on their promised consultation. As I have said before, the new Government, who have not been in office for very long, are considering this question and we will set out our approach in due course. In the mean time, I stress that we welcome the views of interested parties. I should also stress that we are looking at a whole range of issues related to SME financing which I agree is an extraordinarily important matter. The range of issues relates as much to bank lending and keeping the flow of credit going as it does to raising equity.

Lord Eatwell: My Lords, I begin by welcoming the noble Lord to the Front Bench and saying how much I am looking forward to our discussions in the coming months. Given that holding AIM shares is a standard device for the avoidance of inheritance tax, do the Government plan to change inheritance tax legislation to ensure that AIM ISAs do not provide a double tax advantage?

Lord Sassoon: I am grateful to the noble Lord for his welcoming remarks, and for pointing out the advantages that AIM shares carry. That allows me to make the point, for those who would like to see AIM shares included in ISAs, that the consequential could be that AIM shares, if one follows through his logic, would lose some other benefits, principally that of inheritance tax relief benefit.

Lord Newby: My Lords, within 10 days we are going to have a Budget which will contain much more complicated issues than this which the Government will have to take time to look at and reach a decision on. For this purpose, can I suggest to the Minister that his definition of "in due course" might mean the next Budget day?

Lord Sassoon: I wish I could say "in due course" in another way. However, I can only reconfirm my previous Answer.

Lord Christopher: My Lords, I declare an interest as chairman of a small investment management company that markets ISAs. Does the Minister agree that there is another side to the growth coin-the risk to potential investors? The number of people who invest today without really understanding what they are doing is extremely worrying. We have seen plenty of examples of irresponsible marketing and I hope that the Minister will take into account the views of the FSA on risk, which should be made clear to potential investors.

Lord Sassoon: I am grateful to the noble Lord for pointing this out. When ISAs were introduced in 1999, they were intended to be for mainstream investment products so that they would be well regulated and investors would be protected from too much risk as well as having easy access. I take the noble Lord's point.

Nuclear Non-Proliferation
	 — 
	Question

Baroness Miller of Chilthorne Domer: To ask Her Majesty's Government what contribution they will make to the work required to achieve progress on the Treaty on the Non-Proliferation of Nuclear Weapons following the resolution passed at the review conference in May.

Lord Howell of Guildford: My Lords, as we promised on taking office, we pushed hard for agreement of a final document at the Nuclear Non-Proliferation Treaty Review Conference. We will give the highest priority to reversing the spread of nuclear weapons, keeping them out of the hands of terrorists and cutting their numbers worldwide, and we will work with partners to translate those commitments into action.

Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his Answer. There was considerable acclaim at the conference for the UK's leadership role over the past few years in the verification of the disarmament process and, in particular, for our work with Norway. Will he ensure that the Government continue that work, that it is resourced and that Aldermaston retains and develops the expertise needed? Without those practical steps, wishes will remain aspirations as opposed to realities.

Lord Howell of Guildford: My Lords, I thank the noble Baroness. Her concern about and interest in these matters is second to none. At the review conference, it was felt that the treaty had been, thankfully, revitalised and a series of action plans and activities were agreed between the participants, including an action plan for existing nuclear powers; an action plan for non-proliferation checking, although, of course, we have a long way to go on that; civil nuclear energy co-operation; verification procedures with Norway, to which the noble Baroness referred; strengthening nuclear security controls; and calling a regional conference in the Middle East to discuss possible Middle East freedom from weapons of mass destruction. This is a big achievement-a big step-and we should be very grateful that we have managed to make this kind of progress.

Lord Harris of Haringey: My Lords, the IAEA's illicit trafficking database has recorded 336 incidents involving unauthorised possession of nuclear materials and associated criminal acts in the past 15 years. There have also been incidents of terror teams carrying out reconnaissance of nuclear weapon trains in Russia. Can the noble Lord tell us, first, whether Her Majesty's Government are satisfied with the security arrangements around the nuclear facilities in this country and what steps they are taking to protect them? Secondly, what steps are they taking to ensure that security arrangements around both civil and military nuclear facilities elsewhere are being properly maintained?

Lord Howell of Guildford: I thank the noble Lord for his question. We are satisfied, but we are always on guard and always watchful for any need for improvement. The international security of nuclear materials was discussed, analysed and strengthened at the Washington conference in April that preceded the nuclear NPT review conference. A whole series of measures was put forward there and agreed. In so far as one can, one can say that these measures are a step forward in what is undoubtedly, as the noble Lord fully realises, a very dangerous situation.

Lord Hannay of Chiswick: My Lords, will the Minister accept my congratulations to both the Government he represents and the previous Government, since they overlapped during the NPT review, on the work that they put in to achieve a consensus outcome, which I agree was a major step forward? Will the Government press the Secretary-General of the UN extremely hard to appoint a facilitator for the 2012 conference on a nuclear weapons-free Middle East, which has now been decided on, so that a really distinguished, impartial person can get down to work on this very difficult subject without delay? Will they ensure that the Secretary-General of the UN tells his facilitator that he should apply the phrase, "Don't take no for an answer"?

Lord Howell of Guildford: I am grateful to the noble Lord. Part of the action plan for the existing nuclear powers is to involve the UN Secretary-General much more closely and to seek his co-operation in the directions that the noble Lord has described. I cannot vouch for the precise patterns which he will follow, but his full involvement in these matters is a major intention of the signatories to the new conclusions.

Baroness Williams of Crosby: My Lords, the Minister described the excellent outcome of the Nuclear Non-Proliferation Treaty Review Conference. However, the great bulk of non-nuclear powers decided to press for a nuclear weapons convention to abolish nuclear weapons completely by 2025. In the light of that, will the nuclear posture review, which has been welcomed and mentioned by the coalition Government, look into how far we can make precise the future steps towards disarmament that we shall take as a Government? Will it also look at the future of the British deterrent?

Lord Howell of Guildford: My Lords, I am grateful to the noble Baroness, who obviously has enormous knowledge of this subject. The idea of a nuclear weapons convention is a fine one, but we take the view, as I think do other Governments, that it is in practice a question of one step at a time. We want to try to move towards the Comprehensive Test Ban Treaty and the Fissile Material Cut-Off Treaty. A whole series of things need to be done before one comes to the happy situation where the nuclear world is disarmed and a convention could then get full support. If we try to rush to a convention first of all, we might end up delaying the detailed work that is needed on the path to get there.

Prisoners: Voting
	 — 
	Question

Lord Dubs: To ask Her Majesty's Government what are their plans to give prisoners the right to vote.

Lord McNally: My Lords, the Government are considering afresh the best way forward on the issue of prisoner voting rights.

Lord Dubs: My Lords, I am trying to think what "afresh" means. Will the Minister confirm that the Council of Europe yesterday gave the British Government three months in which to comply with a ruling of the European Court of Human Rights and that the previous Labour Government were committed to doing so? Will the Minister give some indication whether "afresh" means "some time" or "not likely"?

Lord McNally: My Lords, "afresh" probably means "with a greater sense of urgency than Ministers in the last Government approached the issue".

Lord Bach: My Lords, as the Minister will recall, this question has been asked many times in this House during the past 18 months. Before the election, the Conservative Official Opposition were strongly in favour of the steps taken by the then Government to implement the ECHR ruling. The Liberal Democrats were equally strongly against our approach, accusing the then Government of dragging their feet, so I think that the House would be grateful to know the view of the present Government. Why is there no mention of this issue in The Coalition: Our Programme for Government? Is the issue not important enough for the document, or is it just too difficult?

Lord McNally: That comes from a Minister who did not even get "afresh" into any of his answers over a long period of time. He will be well aware that the court slightly moved the goalposts, in its decision of 8 April on Frodl v Austria, which narrowed even further the terms under which votes could be denied to prisoners. Given that and the fact that Ministers have just come into office, I think it perfectly reasonable that we be given some time to look at this. At the meeting of the Council of Europe in September, we intend to fully update the council on our thoughts on this matter.

The Earl of Onslow: My Lords, I was on the Joint Select Committee on Human Rights when this judgment was made, and I hoped at the time that grass would be heavily fertilised around this issue. It is the sort of judgment that does not really help to bring the general issue of human rights to the forefront of an Englishman's mind. That is something that I regard as extremely important. We should be clear on human rights-and we should allow grass to grow in great dollops around issues such as this one.

Lord McNally: I think that the noble Lord's Question was about whether the Government were committed to the basic, underlying human rights commitments in our membership of the council-and that is absolutely true and firm. But as at least two of the former Ministers now gazing at me know, there is a range of options. They were working on an option that might have been quite acceptable to a broad base of British public opinion, but the Frodl judgment has moved the goalposts again. That is why we are looking at the matter afresh.

Lord Corbett of Castle Vale: My Lords, can I tempt the Minister to define "afresh" as meaning a period shorter than the seven years which, regrettably, the last Labour Government took to do nothing about this issue? Is it not an absolute disgrace, given the support all around this House for much more emphasis on rehabilitation of people in prison, in this day and age to deny prisoners the vote as part of that rehabilitation process? It is totally wrong.

Lord McNally: My Lords, my senior colleagues in government are considering this matter. All that I can do is to guarantee that the expertise and experience in this House will be transferred to those colleagues.

Lord Ramsbotham: My Lords-

Lord Tebbit: My Lords, can my noble friends' noble friend on the Front Bench tell us if there is any evidence whatever that this measure has any support outside this House among the general public?

Lord McNally: I am not sure that it has support in the editorial columns of the Daily Express or the Daily Mail, but in the broader general public there is a willingness to consider the experience of other countries, both in rehabilitation of prisoners and the kind of punishment meted to them. We will report to the September meeting, and the contributions of this House-both from my noble friend and from the noble Lord, Lord Ramsbotham, I hope-will be taken into consideration.

Lord Maclennan of Rogart: My Lords-

Lord Grocott: My Lords-

Lord Ramsbotham: My Lords-

Noble Lords: Cross Bench!

Baroness Anelay of St Johns: My Lords, may I assist the House? There is plenty of time remaining on this Question. May we hear for the first time from the Cross Benches and then, perhaps, from the Liberal Democrat Benches?

Noble Lords: Oh!

Lord Ramsbotham: My Lords, I suspect that one of the reasons the previous Government took so long to come to no decision was that they were asking themselves, and indeed asking the public through the consultative process, the wrong question. The European Court of Human Rights laid down that every sentenced prisoner had the right to vote. Therefore the question is not who has the right to vote but who does not. In France and Germany, that is decided in court at the time of sentence by the judge according to the crime. Is that approach going to be tried in the fresh look, rather than continuing the sterile one that produced no answer?

Lord McNally: I am well aware that that is one consideration before Ministers at the moment, but it is one of a wide variety of considerations.

Lord Maclennan of Rogart: My Lords-

Lord Grocott: My Lords-

Baroness Anelay of St Johns: My Lords, I accept that there is great expertise and a great interest in this subject. We have already heard from the opposition Benches. May we hear from the Liberal Democrats?

Lord Maclennan of Rogart: In reaching their conclusions, will the Government bear in mind that we should in no way give the impression to the less well informed members of the public that we can pick and choose which rulings of the European Court of Human Rights to implement as the Executive determine?

Lord McNally: I agree, my Lords, but when the court makes rulings and then makes new ones, it is up to the Executive to consider them carefully and consider the implications before they come to a decision. That is what we are doing, and I have already said that we will update the council of our view-not in seven years' time, but in September.

Lord Grocott: There is clearly difficulty here, particularly between the two parties to the coalition. In an effort to be helpful to the Government, I therefore suggest that they do for this issue what they have done already for so many other aspects of the coalition agreement document-set up a commission.

Lord McNally: Even for a former Chief Whip, that attitude is shameless. As has already been pointed out from the noble Lord's own Benches, that lot sat on this decision for seven years. We have to face a new decision made on 8 April, and we have said that we will bring our conclusions to a September meeting of the council. I think that that is pretty good going.

Pensions: Deepwater Horizon
	 — 
	Question

Lord Harrison: To ask Her Majesty's Government what assessment they have made of the impact of the Deepwater Horizon oil spill on British pension savers.

Lord Freud: My Lords, the Deepwater Horizon spill is an environmental and human tragedy. People saving in a pension scheme may be worried by the recent falls in the BP share price and indeed by market speculation about whether BP will pay a dividend this year. However, most pension schemes will be diversified across a range of investments, which will include not only equities but assets such as gilts, property and cash. Those more heavily weighted towards equities should not be too exposed to a single company.

Lord Harrison: Given that some one pound in six of the moneys received by the pension fund comes from BP, does the Minister accept that these environmental risks can become severe financial risks? In light of that, would his coalition Government consider strengthening the reporting by pension funds to shareholders of these environmental, social and governance risks to ensure that the pension funds are not embarrassed in the way that they could be as a result of the recent tragedy?

Lord Freud: My Lords, the noble Lord, Lord Harrison, is right when he says that BP is a major dividend payer. I think that last year it paid approximately 14 per cent of all dividends in the FTSE 100. This raises the question that the noble Lord has just asked: to what extent are pension funds acting responsibly with regard to their ownership responsibilities to companies? There have been improvements in that over the past decade, but the question that we need to consider is whether they have improved enough.

Lord Lee of Trafford: Does the noble Lord agree that the question of BP paying a dividend is a decision for the directors of BP and not for the President of the United States?

Lord Freud: My Lords, whether to pay a dividend is a decision for BP, which is due to make that decision on 27 July at the appropriate board meeting. Anyone who reads the press will know that the company is coming under enormous pressure in the US not to pay a dividend. Indeed, the political pressure may be greater than the financial pressure, because BP is financially soundly based at this juncture.

Lord Soley: Are the Government talking to BP about this, bearing in mind the very real pressures on the company in the United States that could put it under even more pressure? Is not BP in need of help and support from the British Government? Is it being given that?

Lord Freud: My Lords, I understand that the Government are in touch with both the US Administration and BP senior management on a regular basis. Clearly, BP is a private company and one would not want to make public any discussions in that area, whether they were or were not happening.

Lord Richard: My Lords, do the Government feel that BP is being fairly or unfairly treated by the Americans?

Lord Freud: My Lords, that is a deeply political question. Clearly, the emotions raised in the US by this tragedy are enormous. There will be repercussions in the US and in the world as a whole with regard to attitudes towards oil companies. The best that I can say is that we will be watching this space for months to come.

Lord King of Bridgwater: My Lords-

Lord Winston: My Lords, would it not be helpful-

Noble Lords: This side!

Lord King of Bridgwater: My Lords, do not the directors have a duty to the board and the shareholders to meet their correct obligations in full on the serious issues that have arisen in the United States? That must be fully recognised. Having done that, and having made proper assessment of what those are, they also have to recognise the duty to their shareholders in terms of whether to pay a dividend.

Lord Freud: My Lords, I thank my noble friend for that question. Clearly, the BP board has to make some complicated decisions, which are a mix of the financial and the political. Market estimates of the cost that the company will have to pay are in the region of £15 billion to £20 billion, although that is purely market speculation and I make no comment about what the Government expect them to be. The company will have to decide in that context whether it is appropriate to pay a dividend.

Lord Harrison: I am grateful to the noble Lord for his reply to my first question-

Lord McKenzie of Luton: My Lords, on the subject of return-

Noble Lords: Time!

Delegated Powers and Regulatory Reform Committee

Merits of Statutory Instruments Committee

Procedure of the House Committee

Refreshment Committee

Works of Art Committee
	 — 
	Membership Motions

Moved By The Chairman of Committees
	Delegated Powers and Regulatory Reform Committee
	That a Select Committee be appointed to report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny; to report on documents and draft orders laid before Parliament under sections 14 and 18 of the Legislative and Regulatory Reform Act 2006; and to perform, in respect of such draft orders, and in respect of subordinate provisions orders made or proposed to be made under the Regulatory Reform Act 2001, the functions performed in respect of other instruments and draft instruments by the Joint Committee on Statutory Instruments;
	That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
	B Andrews, L Blackwell, L Butler of Brockwell, L Carlile of Berriew, B Gardner of Parkes, L Haskel, L Mayhew of Twysden, B O'Loan, L Soley, B Thomas of Winchester (Chairman);
	That the Committee have power to send for persons, papers and records;
	That the Committee have power to appoint specialist advisers;
	That the Committee have power to adjourn from place to place within the United Kingdom.
	Merits of Statutory Instruments Committee
	That a Select Committee be appointed to consider the Merits of Statutory Instruments.
	(1) The Committee shall, subject to the exceptions in paragraph (2), consider-
	(a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an Act of Parliament;
	(b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament,
	with a view to determining whether or not the special attention of the House should be drawn to it on any of the grounds specified in paragraph (3).
	(2) The exceptions are-
	(a) remedial orders, and draft remedial orders, under section 10 of the Human Rights Act 1998;
	(b) draft orders under sections 14 and 18 of the Legislative and Regulatory Reform Act 2006, and subordinate provisions orders made or proposed to be made under the Regulatory Reform Act 2001;
	(c) Measures under the Church of England Assembly (Powers) Act 1919 and instruments made, and drafts of instruments to be made, under them.
	(3) The grounds on which an instrument, draft or proposal may be drawn to the special attention of the House are-
	(a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House;
	(b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act;
	(c) that it may inappropriately implement European Union legislation;
	(d) that it may imperfectly achieve its policy objectives.
	(4) The Committee shall also consider such other general matters relating to the effective scrutiny of the merits of statutory instruments and arising from the performance of its functions under paragraphs (1) to (3) as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments.
	That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
	B Butler-Sloss, L Eames, L Goodlad (Chairman), B Hamwee, L Hart of Chilton, L Lucas, L Methuen, B Morris of Yardley, L Norton of Louth, L Rosser, L Scott of Foscote;
	That the Committee have power to send for persons, papers and records;
	That the Committee have power to appoint specialist advisers;
	That the Committee have power to adjourn from place to place within the United Kingdom;
	That the Committee have leave to report from time to time;
	That the Reports of the Committee shall be printed, regardless of any adjournment of the House;
	That the evidence taken by the Committee shall, if the Committee so wishes, be published.
	Procedure of the House Committee
	That the Select Committee on Procedure of the House be appointed and that, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:
	B Anelay of St Johns, L Bassam of Brighton, B D'Souza, L Goldsmith, B Gould of Potternewton, L Harries of Pentregarth, B Hayman, L Jopling, L Low of Dalston, L McNally, B Royall of Blaisdon, L Shutt of Greetland, L Strathclyde, B Thomas of Winchester, L Tyler, V Ullswater, L Wakeham, B Wall of New Barnet;
	That the following members be appointed as alternate members:
	L Campbell-Savours, V Craigavon, B Hamwee, L Hunt of Wirral, V Montgomery of Alamein (alternate for the Convenor of the Crossbench peers);
	That the Committee have power to send for persons, papers and records;
	That the Committee have leave to report from time to time.
	Refreshment Committee
	That a Select Committee be appointed to advise on the refreshment services provided for the House, within the strategic framework and financial limits approved by the House Committee;
	That, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:
	L Brougham and Vaux, L Davies of Oldham, L Elder, B Emerton, B Fritchie, L Geddes, B Henig, L Lee of Trafford, B Rendell of Babergh, L Shutt of Greetland, L Skidelsky, B Thomas of Winchester;
	That the Committee have power to send for persons, papers and records;
	That the Committee have leave to report from time to time.
	Works of Art Committee
	That a Select Committee be appointed to administer the House of Lords Works of Art Collection Fund; and to consider matters relating to works of art and the artistic heritage in the House of Lords, within the strategic framework and financial limits approved by the House Committee;
	That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
	L Crathorne, B Gale, L Harries of Pentregarth, B Howells of St Davids, L Luke (Chairman), B Massey of Darwen, E Shrewsbury, L Smith of Clifton, L Stevenson of Coddenham, B Valentine, L Waddington;
	That the Committee have power to send for persons, papers and records;
	That the Committee have leave to report from time to time.
	Motions agreed.

Mid Staffordshire NHS Foundation Trust
	 — 
	Statement

Earl Howe: My Lords, with the leave of the House, I shall now repeat a Statement made earlier in another place by my right honourable friend the Secretary of State for Health.
	"With permission, Mr Speaker, I wish to make a Statement on Mid Staffordshire NHS Foundation Trust. In March last year, the Healthcare Commission's report into Mid Staffordshire and the appalling failures in patient care that were laid bare within it shocked us all. Three reports later and I am announcing today what should have been announced then-a full public inquiry into how these events went undetected and unchallenged for so long. This inquiry will be heard in public, including the evidence, from the oral hearings to the final report. We can only combat a culture of secrecy and restore public confidence by ensuring the fullest openness and transparency in any investigation.
	So, why another inquiry? We know only too well what happened at Mid Staffordshire, in all its harrowing detail, and the failings of the trust itself, but we are still little closer to understanding how it was allowed to happen by the wider system. The families of those patients who suffered so dreadfully deserve to know, and so does every NHS patient in this country. This was a failure of the trust first and foremost, but it was also a national failure of the regulatory and supervisory system which should have secured the quality and safety of patient care.
	Why was it that it took a determined group of families to expose these failings and campaign tirelessly for answers? I pay tribute, again, to the work of Julie Bailey and Cure the NHS, rightly supported by honourable Members in this House. Why did the primary care trust and strategic health authority not see what was happening and intervene earlier? How was the trust able to gain foundation status while clinical standards were so poor? Why did the regulatory bodies not act sooner to investigate a trust whose mortality rates had been significantly higher than the average since 2003 and whose record in dealing with serious complaints was so poor? The public deserve answers.
	The previous reports are clear that a culture of fear existed in which staff did not feel able to report concerns; a culture of secrecy existed in which the trust board shut itself off from what was happening in its hospital and ignored its patients; and a culture of bullying existed which prevented people doing their jobs properly. Yet how these conditions developed has not been satisfactorily addressed. The 800-page report by Robert Francis QC, published in February, gave us a forensic account of the local failures in that hospital and the consequences for patients, but, like its predecessors, his report was limited by its narrow terms of reference.
	I am pleased to say that Robert Francis has agreed to chair this new inquiry, and he will have the full statutory force of the Inquiries Act 2005 to compel witnesses to attend and speak under oath. Clearly these are complex issues and Robert Francis has already said he wants to establish an expert panel that can help support him through this process. However, it is important for everyone that this inquiry is conducted thoroughly and swiftly, with the aim of providing its final report and conclusions by March 2011. I want to assure the House we will not wait to take earlier action where necessary.
	So I can announce today that we are going to give teeth to the current safeguards for whistleblowers in the Public Interest Disclosure Act by reinforcing the NHS constitution to make clear the rights and responsibilities of NHS staff and their employers in respect of whistleblowing; seeking through negotiations with NHS trade unions, to amend terms and conditions of service for NHS staff to include a contractual right to raise concerns in the public interest; issuing unequivocal guidance to NHS organisations that all their contracts of employment should cover staff whistleblowing rights; issuing new guidance to the NHS on supporting and taking action on concerns raised by staff in the public interest; and exploring with NHS staff further measures which could provide a safe and independent authority to which they can turn when their own organisation is not listening or acting on concerns.
	In the coming weeks we will be introducing further far-reaching reforms of the NHS, which go to the very heart of the failures at Mid Staffs. This is not about changes in processes or structures. It is about a wider shift in culture-putting patients at the heart of the NHS and focusing on the things that matter most to them. That includes putting the focus on safety. At Mid Staffs safety was not the priority; it was undermined by politically motivated process targets. The first Francis inquiry was crystal clear on this point. As the report says:
	"This evidence satisfies me that there was an atmosphere in which front line staff and managers were led to believe that if the targets were not met they would be in danger of losing their jobs. There was an atmosphere which led to decisions being made under pressure about patients, decisions that had nothing to do with patient welfare. As will be seen, the pressure to meet the waiting target was sometimes detrimental to good care in A&E".
	We will scrap such process targets and replace them with a new focus on patients' outcomes-the only outcomes that matter. We will empower patients with access to information, giving patients the ability to hold their own records, make informed choices and to interact more readily with clinicians. We will put power in patients' hands because ultimately, if patients had been informed and empowered, if people had listened to them rather than obsessing about centrally mandated processes and targets, these scandalous failings could not have gone unchallenged for so long.
	In closing, I want to say a word about the trust itself. It is so important that this hospital, which has been under such an intense spotlight, is able to continue to improve services for the patients it serves and continue to rebuild the trust and fractured confidence of that community. Staffing has increased, with more than 140 more nurses recruited since March 2009; processes are more open and transparent, with monthly board meetings now being held in public; results are improving; the hospital standardised mortality ratio is significantly lower; and the rate of healthcare-associated infections has also improved. The Care Quality Commission will, in the coming weeks, provide its considered view on progress when it publishes the findings of its "12 month on" review.
	We cannot and should not underestimate the task still ahead and the attention of the trust must not be unduly diverted. That is why I am clear that this further inquiry should not go over ground already covered in the first Francis inquiry and should, as far as is possible, ensure that it supports all those staff who are working so hard to bring about the changes that are necessary. When this inquiry has completed its work and I return to this House to present its report, I am confident that we will, for the first time in this sorry saga, be able to discuss conclusions rather than questions. We will be able to show that we have finally faced up to the uncomfortable truths of this terrible episode, and we will be able to show that we are taking every step to ensure that it is never allowed to happen again. This is a basic duty of any Government. For the people of Staffordshire, many of whose relatives suffered unbearably in the closing stages of their lives, and for the nation as a whole, this is the very least they are entitled to. I commend this Statement to the House".
	My Lords, that concludes the Statement.

Baroness Thornton: My Lords, I thank the Minister for repeating this important Statement. The Secretary of State promised to establish a public inquiry to examine the Mid Staffordshire Foundation Trust when he was in opposition. Indeed, my right honourable friend Andy Burnham informed us of that intention as late as February when he made a Statement on this matter in another place and announced the findings of the Francis report.
	The staff, management and board of the Mid Staffordshire Foundation Trust have worked hard to turn round this foundation hospital and to re-establish good relations with their local community. They now find themselves back on the front page for failures that occurred three or four years ago, which have already been the subject of three inquiries. Therefore, my first question to the Minister is, how do the Government intend to support the staff and management of Mid Staffs during the coming public inquiry? I agree with the noble Earl-it is important to put this on record-that we should acknowledge the work that the current chief executive and chairman have undertaken in the past year or so to turn round this hospital, which has met with a large measure of success. I hope that the Government will support them in the coming months.
	There have now been three reports into the terrible events at the Mid Staffordshire hospital. Professor Sir George Alberti published a review of the hospital's progress in emergency care, and Dr David Colin-Thomé published a report on how the commissioning and performance management system failed to expose what was happening in the hospital. The independent inquiry by Robert Francis QC was then established in July 2009. That report is 800 pages long, and I think the noble Earl will agree that it reflects with accuracy the terrible catalogue of failure of care of patients and their families, the comprehensive failure of the management and the failure of the foundation board. As my right honourable friend in another place said, our job in government then was to hold a mirror up to the NHS, which is why we commissioned the Francis report in July and brought forward the further proposals and terms of reference for a further inquiry. Therefore, of course the new inquiry has our full support, as has anything in the Statement that, for example, strengthens and supports whistleblowers in the NHS.
	My next question is: how much account will be taken of the previous reports, conducted as they were by very distinguished medical and legal professionals? Can the Minister explain in what way the questions or terms of reference of the new inquiry will differ from the draft terms of reference which my right honourable friend agreed before the election? How long will this inquiry take and how much will it cost? Indeed, what has happened to the many recommendations made in the Francis report in February, which were accepted in full by the then Government? Will they continue to be implemented while this inquiry is ongoing?
	Where I think that the Statement is disappointing and perhaps even dangerous is in the reference to targets. It seems to me that the noble Earl is in danger of prejudging the findings of the public inquiry in his undertaking to get rid of targets. The Conservatives have made it clear that they have an ideological opposition to targets, and they have used what happened at the Mid Staffordshire NHS Foundation Trust as their main example of why the four-hour target in accident and emergency is bad. We can have a discussion about that target. We think it is about national standards and that it is a tool for improvement. We also think it is about patient safety-indeed, it has huge support from patients and health staff, including doctors. What we know about Mid Staffordshire is that staffing fell to dangerously low levels. We know that it was not following the national guidance on targets and that it had a stupid staffing policy, which meant that it did not have enough nurses. We also know that the board and management completely failed to address these matters.
	What will the Government do if the public inquiry finds that it was these gross failures at every level that were the problem and not the targets? It would be very unfortunate if this inquiry were used by the Government to justify their commitment to that ideology. Does the Minister agree that there needs to be a balance here? Surely the public inquiry needs to address with an open mind these isolated and awful events in this hospital, and then other hospitals and the NHS can learn the lessons from that. If that is the aim, the Government will have our full support.

Earl Howe: My Lords, I am grateful to the noble Baroness for the general welcome that she gave to the Statement and to the decision to announce a public inquiry, which indeed the previous Secretary of State signalled his intention of doing before the general election. I agree with a great deal of what she said-particularly the need to support the staff of the hospital. Indeed, my right honourable friend the Secretary of State is to visit the Mid Staffordshire hospital tomorrow and will make a point of seeing the staff and expressing his support, not just for the work that they are doing but for the progress that they have made since these matters came to light, and will assure them that nothing should distract them from that work as this new inquiry proceeds.
	The noble Baroness asked how much account will be taken by Robert Francis of the previous reports. The answer to that is full account. We have made it clear to Mr Francis-and he has not been slow to agree-that there is no point in going over the same ground again. Mr Francis has many fine qualities, but one of the great advantages of his agreeing to do this is that he will, so to speak, hit the ground running. He is on familiar territory. We hope that he will have completed his report by March of next year. We recognise that that is a tight timescale within the context of the Inquiries Act, but he believes that it is eminently possible and we wish him well. The manner in which he will conduct his inquiry is the subject of a separate announcement that he has made this afternoon, and I understand that it is now on the departmental website, so the process will be clear from that.
	The noble Baroness asked me about the terms of reference and the difference between this inquiry and the previous one. To encapsulate that difference, the previous inquiry concentrated on what happened at the trust while this one focuses on the lessons for the wider system. The other difference is that the first inquiry was carried out under the NHS Act and this inquiry will be conducted under the Inquiries Act, which is a much more powerful statutory basis on which to proceed. It means that there is a presumption that hearings will be held in public and that records of evidence and information given to the inquiry must be made available to the public. There is a power of compelling witnesses to attend and give evidence, a power to take evidence on oath and a power to make recommendations if Mr Francis so wishes, not just about the NHS but about bodies other than the NHS. He can make recommendations to the GMC, for example, which the previous inquiry could not do. These are important added factors.
	The noble Baroness asked me about targets. I am well aware that she and I do not entirely see eye to eye on this, but I would like to think that we are perhaps closer together than she supposes. It is not that we regard all targets as bad and wrong, but we think that there should be an analysis of the clinical relevance of the targets that are now in place. How much clinical underpinning do they really have? Some of them have considerable underpinning clinically. One thinks, for example of the hospital-acquired infections target, which is clinically very important. But there are others that we will have to look at very carefully. They have less relevance but of course we are taking advice from the medical community. On the four-hour A&E target that the noble Baroness mentioned specifically, of course I recognise that time limits in A&E are very important to patients, but the precise nature of the current target may be wrong-we think that it is distorting priorities within many trusts. We will not take a doctrinaire approach and say that all targets have to go but we want to look at them carefully to make sure that they are useful.

Lord Alderdice: My Lords, the immediate response of my honourable friend Norman Lamb in the other place to the 2009 Healthcare Commission report was to call for a public inquiry. My noble colleague the Minister can be absolutely confident of the warm welcome on these Benches to the decision to have a public inquiry, a request that was refused by the previous Government. One has to suspect that it was refused because of the likelihood of exposing the inadequacies not just of a particular hospital and trust board but of the regulatory system that had been put in place and the culture of target and finance-driven managerialism that the previous Government championed.
	I am sure that the noble Earl expects that this will be exposed in the public inquiry, but is it not important that we should not only protect whistleblowers-he has announced important developments in that regard-but address the whole culture that regarded professionals and commissions raising questions and concerns as troublesome and disloyal rather than as wanting to improve the standards and quality of the service? What is needed is a change in the culture, so that the views of clinicians of all professions are valued, welcomed and encouraged. The priority of managers is not to dominate the service and to impose politically driven targets but to provide it with high levels of patient care.

Earl Howe: My Lords, I agree wholeheartedly with my noble friend that in many parts of the NHS we need a culture change-a culture that puts patients first. We need an NHS that listens to patients and responds to their concerns and needs. We must prioritise the people whom the NHS serves and we must listen to the doctors and nurses who work in it. The measures that we are taking today on whistleblowing are important. Last week, we began to publish more transparent data about the NHS so that people can hold their local services to account in a more meaningful way. We are looking also at reducing the number of hospital readmissions, as I am sure my noble friend is aware.
	The culture change that is needed will not happen in a hurry and I would not want to give the impression that it is required everywhere in the NHS. Mid Staffordshire was an unusual event, but unless we get to the bottom of why it happened there must be a fear that it may happen again. As we move forward and propose to Parliament changes in the way in which the NHS is regulated and care is commissioned, we must not lay ourselves open to unintended traps. I therefore concur with all that my noble friend said. I think that he will find, as we bring forward our proposals, that the emphasis on transparency, openness and the patient's voice will do much to address the concerns raised.

Baroness Finlay of Llandaff: My Lords, the Minister has spoken about listening to professionals and to patients. Will he give an undertaking that, long before whistleblowing is necessary, there really will be measures in place to support staff who want to raise concerns that changes proposed by management might adversely affect patient outcomes? That requires an empowering of clinicians at the coal face.
	Furthermore, as the Government consider changes in the NHS generally, will they not be fooled into thinking that this was a completely isolated event? I fear that there are a lot of other pockets in the NHS that are not right. What emerged from the inquiry were the voices of the patients' relatives. When they gave evidence, those voices shouted out loud and clear that things were wrong, but they were not adequately heard. I commend-I declare an interest here-the Dying Well Matters programme as part of the Wales 1000 Lives Campaign, which I have been involved in instigating. It routinely seeks stories from relatives and patients before trouble occurs to try to detect those subtle but extremely distressing instances of poor and inadequate care in parts of the service that otherwise might go unnoticed.

Earl Howe: My Lords, as ever, the House will listen to the noble Baroness with great attention and respect, knowing that she works in the midst of an important and active part of the NHS. I hope that she is wrong and that the seriousness of the malpractice at Mid Staffordshire is rare, but we have to be vigilant. There could be another instance of a failing trust out there. The House may want to know that the Care Quality Commission has announced the registration status of 378 NHS trusts to provide healthcare services from 1 April. Only 22 of those are registered with conditions, but the CQC has said that those trusts are safe to provide services to patients. No trusts were refused registration, which is an important point.
	On the question of openness within trusts, the noble Baroness is right: a culture of openness and willingness to learn from mistakes is essential to a health service that wishes to improve. There is a requirement on hospitals to inform regulators about serious errors, but that requirement does not extend to informing patients, so we are looking at how that can be addressed.

Baroness Knight of Collingtree: My Lords-

Lord Warner: My Lords, I think that it is this side's turn-

Noble Lords: Order.

Baroness Knight of Collingtree: My Lords, I believe that it is our side's turn.

Lord Astor of Hever: My Lords, there is plenty of time for both sides. I think that it is this side's turn.

Baroness Knight of Collingtree: My Lords, I shall be brief. I have never felt so much gratitude towards a Minister as I feel at this moment. He has created a first in my parliamentary life. Never before in 44 years have I had the requests placed so clearly in a speech met six days later: care for patients, an understanding that non-medical people are not always the people to make decisions, and safeguarding what whistleblowers have to say. In fact, there were other hospitals-Maidstone and several others come to mind-where serious problems had arisen. I have raised such cases many times with dates and all details and had no answers given as to why patients were treated so badly. In the case of Stafford, the chief executive of that hospital, who had been in command for the whole of the time during which that terrible record was amassed, was then given a very senior position with as much responsibility elsewhere. Will the Minister look at that, because we must safeguard patients, wherever they may be?

Earl Howe: I am grateful to my noble friend for her kind comments. The House will know what a champion she is of patient care and compassion in the health service. On her last point, it is of course for Robert Francis, who is in charge of the inquiry, to decide whom he calls as witnesses, but he has a completely free hand and I am sure that he will take note of my noble friend's suggestion.

Lord Warner: My Lords, before I ask my question, I suggest that we register that the usual channels might discuss the sequencing of speakers from the government Benches and these Benches, because I am not sure that there is a correct interpretation.
	I have no objections whatsoever to this wider inquiry. I hope that it will look carefully at the extent to which doctors, nurses and managers failed in their professional responsibilities. What the regulators and other bodies did might also be usefully looked at. However, does the Minister accept that it is easy in such circumstances to reach for something that cannot answer back, such as a target, to explain away what is essentially appalling clinical and managerial behaviour? That is clear from many other inquiries into what happened in Mid Staffordshire.
	If the Minister wants seriously to consider targets, he might read some of the speeches made by previous Ministers, who made it crystal clear to the NHS that its overriding responsibility was to the care and safety of patients, not obsessively to implement targets. I know that there are conventions about looking at papers from previous Administrations, but I would certainly be prepared to waive that consideration. Will he also look at the extent to which John Reid, when he was Health Secretary, amended the way in which the four-hour target was implemented in response to concerns expressed by doctors? He might like to see the minutes of a meeting that I had with the College of Emergency Medicine. Members of the college came to see me as a Health Minister to ask me-beg me, almost-not to amend the four-hour target because of the improvements that it had produced for its members, for patients and for the way in which hospitals were run. Will he also look at the Nuffield Trust's independent inquiry into targets, which also shows the benefits that they have brought to patients in terms of better access and shorter waiting times and which compares the experience in England, where there were targets, very favourably with that in the Celtic fringes, which did not have them?

Earl Howe: My Lords, we are not targeting the targets with this inquiry. They are not the main point at issue. The noble Lord is right that the main point at issue is the failure of care, but that is also, as we hope this inquiry will show, a systemic failure. That is the point of the inquiry. I do not doubt anything that he said about the commitment of previous Ministers to putting care above any rigid adherence to targets; I fully accept the good faith of Ministers in the previous Administration in that regard. However, the noble Lord will know that what Ministers say is very often not interpreted in the same way on the ground in the NHS. When people in the NHS hear things coming out of Whitehall, they are inclined to adhere rigidly to what they are told to do. That is part of the problem, but it is not the problem that I want to emphasise in this context. We need to understand how the wider performance management and regulatory system failed to spot the problems earlier and deal with them and why so few professionals felt that they could challenge what they saw. Understanding the lessons from that and the culture in which the events at Mid Staffs were allowed to happen will be key to informing and shaping our plans for the future.

Lord Patel: I declare an interest as chairman of the National Patient Safety Agency. I concur with what the Minister just said: the regulatory authorities that scrutinise the performance of trusts failed Mid Staffordshire. I was criticised for publishing reports of all trusts linked to two parameters of quality of patient safety: trusts' reporting of incidents and mortality ratios. On both those criteria, Mid Staffordshire would have failed, as other trusts fail now. We need an inquiry that identifies parameters of quality and safety that could be embedded across the whole of the NHS so that we can identify failing hospitals early on and remedy them. I support the inquiry.

Earl Howe: I pay tribute to the noble Lord for his work, in particular for his work with the National Patient Safety Agency. As he will know, hospital standardised mortality ratios are something of a vexed topic. Professor Sir Bruce Keogh, the NHS medical director, has established a working group that will review how those ratios are derived and recommend what method should be used consistently for the NHS in future. The aim is to provide simple, practical guidance on how the ratios should be interpreted and used with other sources of information. Once the technical basis for this work has been developed, it is planned that patients and patient groups will be invited to become closely involved.

Lord Low of Dalston: My Lords, the Minister referred to seeing to it that, following the experience of Mid Staffs, more information will be given to patients. He will no doubt recall from debates in this House during the passage of the Equality Bill that research carried out by Dr Foster for RNIB, of which I am a vice-president, showed that as many as 72 per cent of patients were given information by their GP that they could not read. Even higher figures were uncovered in relation to the rest of the NHS. Will the noble Lord give a commitment that the Government will take steps to ensure that information is given in accessible formats to patients who have difficulty in reading information in ordinary print? To assist in doing this, the Government will have at their disposal the strengthened rights of access to information in accessible formats included in the Equality Bill before it passed into law.

Earl Howe: I am grateful to the noble Lord for his question, which is spot on target-if I dare use that word. The need to create more accessible information for patients is central to the Government's agenda for creating choice. Choice is meaningless unless it is informed choice, which means rolling out choice to every patient, including those who are visually disabled. We are determined to make more information about care and safety standards and performance available to the public and staff. That should be published online and in formats accessible to all patients. I assure the noble Lord that we will bear these points closely in mind as we develop our plans.

Lord Burnett: My noble friend is right that a widespread culture of secrecy and fear pervades the NHS. I welcome wholeheartedly the establishment of this inquiry and the proposals to buttress the rights of whistleblowers. Will the Government consider making concerted efforts to recruit managers, especially at senior levels, from outside the NHS? I am aware that some high-calibre people are non-executive directors, but we need and should recruit high-calibre non-executive directors in the NHS who are independent, intelligent and fearless.

Earl Howe: I fully agree with my noble friend. We have asked the Appointments Commission to set out proposals for a revised person specification for chairs and non-executive directors to ensure that it is aligned with the current priorities and principles of the NHS. We want to continue to deliver high-calibre non-executives, in particular, who are needed to meet the challenges ahead. The general point raised by my noble friend is well made and we shall certainly take it forward.

Baroness Pitkeathley: My Lords, I declare an interest as chair of the Council for Healthcare Regulatory Excellence. Will the Minister confirm what I think was the thrust of the Statement, which was that regulation and regulatory activities should always be about patient safety and not about maintenance or promotion of professionals? As the strong and welcome implication of the Statement is about putting patients at the centre, does he expect the inquiry to give any indication as to how patients should be supported in bringing forward their concerns?

Earl Howe: On the last point, we are doing quite a lot of work in the department to ensure that patients are supported in an appropriate fashion in their dealings with the health service. Our plans for what we hope to call "health watch" will flesh out that point. I agree that safety lies at the heart of the quality agenda, which was commenced in earnest by the noble Lord, Lord Darzi, when he was a Minister. I have the privilege of being responsible for that agenda, which is being continued with urgency. We are committed to developing the role of the Care Quality Commission to make it a more effective regulator of health services in England. We will bring forward proposals that will focus on the outcomes of the care experienced by patients. The Care Quality Commission will be intimately involved in that.

China: EU Committee Report

Stars and Dragons: The EU and China

Motion to Take Note

Moved By Lord Teverson
	To move that this House takes note of the Report of the European Union Committee on Stars and Dragons: The EU and China (7th Report, Session 2009-10, HL Paper 76).

Lord Teverson: My Lords, at the moment we in the western world are inward-looking. What we see as a global financial and economic crisis makes us in the western economies and societies look inwards more than we have done for many years, and we have not been paying as much as attention as we did a few years ago to the rise of many other economies around the world, particularly China. Yet the Chinese economy has been growing at some 10 per cent per annum and has become effectively the third largest economy in the world behind the European single market and the United States. It still has a very large trading surplus with the western world, including the European Union, and it is continuing to spread its influence, investment and tentacles across the developing world. It is a country, an economy and a trading nation that we cannot afford to ignore, let alone forget about. We need to keep the focus on it.
	For this report, we intended to look at the broad relationship between Europe and China and ask ourselves what the nature of that relationship should be, what it should include, and in which areas the European Union should take action to make sure that the relationship is more effective. For the benefit of the House, I shall give a little of the history of the relationship between the European Union and China. It is perhaps staggering that the current formal legal relationship, in the form of a trading and co-operation agreement, was made between the EU and China in 1985. Although it is 25 years old, it is still valid and is the basis on which EU-China relations formally work. Since then we have seen the introduction of annual summits and, more recently, regular high-level dialogues between Ministers and their equivalents on both sides. Indeed, in 2007 it was agreed that there should be a new partnership and co-operation agreement that would cover a far broader range of subjects than just that of trade as covered in the original agreement. The negotiations towards it continue, but three years later, the agreement is yet to be fulfilled.
	The headline from the report and the view of the sub-committee is that, given the important nature of the two entities-one a sovereign state and the other a collection of member states-the agreement needs to be of a much more strategic nature than at the moment. Europe comprises some half a billion people, while China has 1.3 billion. Along with the United States, between us we account for over 50 per cent of global greenhouse gas emissions, and we are major players not just in the world economy but in how the world will work in the future. We believe, therefore, that we should have a much better and more strategic relationship with China.
	One of the themes that came up repeatedly throughout our studies was the concern whether Europe had already lost the game and was being left out in terms of future global relations, so that we would have a G2-the two being, of course, China and the United States. We considered this many times, but the committee felt that that was not the case at this point, that it certainly should not be the case, and that the G20 model, in which China participates strongly, would provide a much better role in terms of future inter-governmental co-operation at the global level. The G8 is clearly moving on; it is important to include the developing nations within that, and China could play a strong role. At the moment our relationship with China is not a strategic one. It was described by one of our witnesses-and agreed by the committee-as more representative of a collaborative relationship.
	Looking back on the history of EU-China relations, up until 2003 China saw Europe as an important player on the world stage generally. It saw it as a balance to the power of the United States-in an economic if not a military or security sense-and it took great time to understand Europe and invest in the relationship. In 2003, a small incident changed the nature of the relationship. This was when a number of major member states within Europe started to make it clear to China that the EU arms embargo should be removed. That expectation moved to the brink and, although it may not have made a great difference to the way in which the arms trade worked, it was an important policy decision. However, because of the intervention of the United States, negotiations stopped and the arms embargo remained. It was felt by a number of witnesses that at that point China no longer saw the EU as having a pivotal role in its relationships, particularly with the United States, and that, in many ways, it was a partner to the United States in a different way to China. We still have to recover from that situation.
	Indeed, one of the lessons that we learned from that episode is that the EU must never again put itself into a position where it is directly in conflict with the United States in its relationship with China-and certainly not into a position where it changes its own policies. There needs to be much greater consultation and co-operation in that area.
	It came through from a number of witnesses that the EU, a major economy-among the world's largest-and a large market for China, failed generally to put leverage on to China in regard to certain decisions. To say that the EU rolled over on every occasion is clearly not the case, but we felt that, given our strong trading position, our market and our position in the world, the EU failed to use its natural power to sufficiently influence Chinese policies in areas such as human rights, trade negotiations, intellectual property and access to markets.
	An example of when the EU did not help itself was described by a number of our witnesses. This was when the Heads of Government of three major member states-the United Kingdom, France and Germany-entered into a dialogue with the Dalai Lama. China took diplomatic action and, at the same time, other member states tried to take advantage of the situation. We showed no solidarity whatever and the rug was taken from under the feet of the European Union as a whole-this happened during the French presidency under President Sarkozy-when the Chinese cancelled a summit that was due to take place between the EU and China. The committee asked itself whether China would ever have done what it did to the European Union if the United States had been its strategic partner. There is a great need to show strength of unity and to use leverage wherever possible.
	The sub-committee also felt that there was a mismatch of understanding within the relationship. The Chinese embassy in Brussels has some 70 or 80 staff and it sends a large number of students to European and other western countries to understand their culture and the way in which they work. There is much greater understanding of the English language in China than of the Chinese language in Europe. There needs to be much greater investment in our understanding of China.
	A possible outcome of that lack of understanding is that we look upon China as a single entity. To a large degree, it is clear that it is. It is a centralised, unitary state, with one-party rule everywhere apart from in Hong Kong. However, we forget that there are 31 different provinces in China whose provincial Governments have many powers, even within international investment projects. There are also some 55 minority populations, of which the Han Chinese are by far the largest. The EU therefore needs to have a more complex view of China as a nation, particularly in its dealings on development issues.
	The sub-committee was in China for one week. You cannot see a great deal of the country within that time, but we did visit one of the industrial areas in Guangzhou and the Pearl River Delta. Although this is a major industrial area, and although a very effective UK trade delegation is there, we were surprised to find that EU representation was concentrated within Beijing and that it did not have any trade delegations or staff in the provinces. A presence in the provinces is important not just for promoting trade, which is much more a national issue, but also for market access and for making sure that WTO rules are applied and that the writ of trading rules in Beijing is felt out in the provinces.
	However, we were not as utterly pessimistic as I have sounded so far. We were encouraged that China is starting to take on a broader role as a world citizen. It is still finding its way in this area and we felt that it was in many ways hesitant to take on that broader responsibility, let alone a regional responsibility. Yet we were surprised, as might be many of your Lordships here, that China is the largest contributor of peacekeeping troops of the permanent five members of UN Security Council, P5. While it has participated independently in the Somali counterpiracy operation, its naval force has co-operated with the EU's Operation Atalanta and the NATO force. We welcome this taking-on of responsibility, while understanding that there is nervousness among the western security community about what that might lead to in the future. We welcome China's increased world citizenship.
	It is clear that China's main relationship with Europe is through trade. In 2008, there was a €170 billion deficit between the EU and China. Ironically, one of the outcomes of the recession is that the trade deficit has gone down, but we were reminded that an important aspect of the international recession is imbalances such as that in trade between China and the western economies. The undervaluation of the Chinese currency has enabled China to have very high savings at a time when the West has consumption and very much a trade deficit. So what we see there is a balance that has not changed but needs to change, for future economic stability. With the United States, Europe needs to ensure that there is a resolution of that problem over time before it again becomes a major problem to world trade.
	Many noble Lords will be particularly concerned with the human rights issues. We were concerned that there was too much rhetoric and grandstanding and not enough effect in that area, and I know that a number of noble Lords will wish to talk about that. One area that we found very positive, which was never mentioned by the Commission in Brussels but which we saw on the ground, was a number of practical justice and rule-of-law policies, investments and developments that were EU-financed and that found success and were welcomed at a provincial level by provincial Chinese government. We felt that those should be particularly strongly invested in. As for the broader human rights issues, it was pointed out to us by China's Government that, through their economic development, social rights have been improved as at no other time in history. Several tens of billions of Chinese citizens had been taken out of poverty by the current growth and regime within China. We do not dispute that-we welcome it. However, clearly it is not acceptable that that still comes at the level of restriction of human rights and democracy that that still represents.
	On climate change, we saw the shift of power from west to east at Copenhagen. Although China signed up to reducing energy intensity at the Copenhagen accord, it was a great sign to us of Europe's failure in that negotiation that it was hardly involved in the Copenhagen accord, while China chaired it and influenced how it worked. We are still in a position of having great challenges as we move towards the next meeting on climate change at the end of the year in Mexico.
	I shall leave the description of our report at that. The clear message that came over to us was that in the 21st century, as China clearly improves its economic performance even more and its importance in the world increases, it was essential that the EU had a proper strategic relationship with China. Is the Lisbon treaty, which came into force while we were looking at this relationship, going to enable that? It could do-but we were far from convinced that it would. The summit that took place this May was positive, but I do not think that it moved that relationship forward very much. The challenge is with the European Union to use its power, influence and moral authority to create a strategic relationship that works for the rest of the global community. I beg to move.

Lord Howe of Aberavon: My Lords, it is a pleasure to welcome the speech just made by my noble friend and the report of the sub-committee under his chairmanship. As his presentation made clear, it produced a comprehensive, clear and constructive report containing some plain and important messages both for the United Kingdom and the European Union, as well as the People's Republic of China.
	The central message is clearly important. If ever a subject cried out for pan-European consideration, it is the management over the long term of our relations with China. That proposition contains no suggestion of hostility, although I noticed with some irony the use of the word "tentacles" by my noble friend. I know that that was not meant to be a demonstration of hostility. There is no question of hostility, but there is a growing significance and diversity of common interests, all requiring the consideration of collective response by the European Union-on climate change and energy, the WTO and IMF obligations, intellectual property rights, the impact of Chinese investments on developing countries and the possible sources of political tension in North Korea, Myanmar, Taiwan and so on.
	I am glad to be able to welcome what is said in Paragraph 303 of the report. It states:
	"China... has gradually been prepared to play a more constructive role in respect of some armed conflicts in Africa".
	My noble friend did indeed make that point. One must hope for a continuation of that-a less passive role by China, for example, in relation to a different style of conflict, whether in Myanmar itself or in Zimbabwe.
	I am glad, aside from my noble friend, to be able to endorse the recognition by our new Foreign Secretary, who made his celebrated maiden speech at a party conference in the debate to which I had to reply. He outshone me throughout the evening as I commented on his speech, rather than he on mine. I have great confidence in him. He has been emphasising the value and necessity of approaching these problems and others from a European base. That is an important proposition.
	I agree with my noble friend that the formalities of the Lisbon treaty are far from being a magic wand in this context. I venture to suggest that our own colleague, the noble Baroness, Lady Ashton, although she is not here, has an important role to play in this. Because of her demonstration of leadership qualities in this House, I think that she will achieve a constructive partnership-even leadership-with our own Secretary of State and other colleagues in the foreign affairs field.
	My second major point is no less important than the first. In Britain's case, at least, and not just in relation to foreign policy, there is truly an important independent role to be played. There are two reasons for making that point. The first is the probability that both our countries, the United Kingdom and the People's Republic, are likely to remain permanent members of the United Nations Security Council. I know from limited experience in that context that it gave an opportunity for me to collaborate with my then Chinese opposite number in that venue. It is no disadvantage that the only other European member is France.
	The second reason for confidence in this relationship is the fact that the United Kingdom and China have a long, although sometimes chequered, mutual relationship with each other. We share a sense of history that we are not able to share in quite the same way with other countries.
	For me personally, if I may digress for a moment, my own contact with this concept first arose on 5 January 1950. Together with my noble friend Lord Jenkin of Roding, who is not here today, and one other Cambridge undergraduate, I was, rather surprisingly, in Ebbw Vale preaching the cause of Conservatism and holding what was laughingly called a "brains trust" in the constitutional club of that important community. On that day, the news had broken that Ernest Bevin, that terrible socialist Foreign Secretary, had announced Britain's recognition of the People's Republic of China. Surprisingly, members of the club asked us the question, "Do you Conservatives agree or not agree with this rash decision taken by this socialist Foreign Minister?". We had all been well trained by Professor Sir Hersch Lauterpacht, and we all responded collectively to say, "Of course we agree with Ernest Bevin's decision". That laid a firm foundation for my relationship with China thereafter.
	The next step came, a little more seriously, in 1973 when I had my first meeting-in the United Kingdom, as it happens-under the benevolent surveillance of my noble friend Lord Walker, who, unhappily, is not with us at the moment. I was Minister for Trade and Consumer Affairs, and I met my Chinese opposite number. Again, the bridge was being built a little further. For that reason or some other, I became a friend of China to the extent that, in 1978, I found myself invited as a guest by the People's Republic together with my noble friend Lord Brittan of Spennithorne and my noble kinsman who is not here. The three of us were in the party together. I remember one episode. There was a notice put out by the China Dailynewspaper to the effect that:
	"Vice President Gu Mu had received British Member of Parliament Geoffrey Howe and his wife Leon Brittan".
	We overcame that.
	During that visit one of our missions was to search for the existence and effectiveness of anything resembling the rule of law in China. We found very little evidence of it. The gang of four were only just being identified as being responsible, with Chairman Mao, for the destruction that had taken place. In Beijing itself we searched for lawyers and eventually met three ageing and retired lawyers from what had once been Beijing University, and that was not very encouraging. In Shanghai, on our last day, we went inside a police cantonmentand were there shown what purported to be a law court. There were only two characters there with white shirts on who claimed to be judges and turned out to be retired generals. When we asked them whether there had been any acquittals during their time at the court, they said they could not recollect anything of that kind. I say that not to be humorous but to emphasise the extent of the depth of uncivilised culture that the Chinese themselves are beginning to acknowledge as they get away from the rules that had been made.
	Six years later, I was privileged as Secretary of State, under the leadership of my noble friend Lady Thatcher, to take part in the Hong Kong negotiations. One saw then, in the wisdom with which those were conducted by the then Chinese leader Deng Xiaoping, the extent to which their leadership was developing wisdom that would lead it far into the future not just in economic terms but in political and institutional ones as well.
	Deng Xiaoping's four-word phrase "one country, two systems" was one of the wisest things that one has ever had to work within. He hoped that it might one day work for North and South Korea, and we must share his hope. He hoped that it would one day work in Germany, but he was overtaken by the collapse of the Berlin Wall. It enabled him to ensure that the agreement we made for Hong Kong guaranteed the survival of the rule of law in a strong form and guaranteed the existence of the Court of Final Appeal, which still includes two members of our own Supreme Court. It provided for a Legislative Council constituted by elections to come into existence in due course and that the Executive should be accountable to that legislature. That process moves on. Universal suffrage is now likely to arrive in 2017.
	I mention that for our own significantly useful impact on the future of Hong Kong and then offer a word about such influence as we may have on the great mass of China itself. It is well known that China regards human rights as a strictly internal matter. None the less, it does recognise pragmatically that her own commitment in that direction-and there is such a commitment-as well as to the rule of law requires technical support which makes her willing, in practical terms, to study the models of other legal systems. China has long felt that the United Kingdom has much to offer in this area. We have found ourselves leading a handful of countries-the United States, Canada, Germany and Scandinavia-at a serious level on these human rights issues.
	In that context, Beijing was persuaded some years later by John Major in his premiership in 1992 to receive a mission from this Parliament of ours, of which I was the modest leader, to study-this is carefully drafted-
	"Matters of common interest, including human rights".
	The party included my noble friend Lord Higgins and, more important than that for tonight, the noble Lord, Lord Anderson, who is in the Chamber. We were members of a party of 11 who went together. I remember the way in which we were warmly received by the then General Secretary-later President-Jiang Zemin. He made the point-also made by my noble friend Lord Teverson-that the most important human right for China at that time was the feeding of 1.25 billion people, coupled with the enlargement of social freedom to move, and so on. That was the point that the General Secretary emphasised. However, we made specific recommendations, and we were delighted that four years later, in 1996, the NPC-the Chinese Parliament-enacted legislation providing for a presumption of innocence, a bail system and the existence of defence lawyers. In fact, two out of three of those propositions are now in place. Bail remains a rather shadowy proposition, and it does not surprise one that shortly after the NPC passed the legislation, a Beijing newspaper reported that a retired police superintendent-a member of the NPC-had protested to the meeting that, given all these changes, how could he be confident of capturing criminals? There is that balance of debate in more places than one.
	In that context, perhaps I may declare an interest in the Great Britain-China Centre, of which I have been president since 1992. Many colleagues may not have heard a great deal about it, but it has been, and is, a vital vehicle in pressing for the objectives that I have been talking about-the rule of law, human rights and the various missions financed by the European Union and this country that are being undertaken, together with highly technical assistance in sensitive areas of work. The centre helps in the fundamental role of building up trust with key institutions, such as the Supreme People's Court and the Procuratorate. The centre of our current work includes the reduction of the use of torture and firmly addressing the excessive role of death penalties. We are all clear in our memory of that, due to the recent tragic execution of Akmal Shaikh-despite our protests.
	It now gives me pleasure to draw attention to a report in China Daily on 31 May, under the headline:
	"New rules on confession to limit death sentences".
	I shall quote just two sentences:
	"Evidence obtained illegally-such as through torture during interrogation-cannot be used in testimony, particularly in cases involving the death penalty, according to two regulations issued on Sunday ... jointly issued by the top court, the top procuratorate, the ministries of public security, state security and justice".
	One has always to hesitate regarding the difference between that which is proclaimed and what happens, but I draw attention to the fact that this is part of steady progress in the direction which we seek to encourage.
	My final point concerns the uniquely purposeful quality of the Great Britain-China Centre's achievements. They involve what strikes me, as an ex-Chancellor of the Exchequer, as a very small spend indeed by Her Majesty's Government. The grant-in-aid received by the centre was £300,000 last year. It has been reduced to £270,000 this year, with which we are able to lever other funding institutions, including the European Union, to raise our resources to about £1 million. We are anxious that we should not be further squeezed in the present circumstances.
	I dare to say this: in so far as money becomes a problem, given what the Treasury may seek from our overseas budget, I urge the Chancellor to reach out-this may sound very inhuman-towards the huge proportion of that budget exercised by the Department for International Development, so as to allow strong and worthwhile projects, such as those that I have described in the Foreign and Commonwealth Office budget, to continue to prosper in Britain's and Europe's joint interests in the People's Republic of China.
	My Lords, I rest my case.

Lord Anderson of Swansea: My Lords, I congratulate the noble Lord, Lord Teverson, on his opening speech and his very able chairing of our committee. I am truly delighted to follow the noble and learned Lord, Lord Howe, who has a distinguished history with China, not least in respect of the smooth passage of Hong Kong to being a special administrative region of the People's Republic of China.
	I was, as the noble and learned Lord said, the statutory Labour member on the human rights mission in 1992, which increased enormously my admiration for the noble and learned Lord as a great leader. Perhaps I may be allowed one short memory of that visit. New passports had been issued in the UK shortly before the visit. The then Prime Minister, with appropriate humility, chose the number 001. The noble and learned Lord, Lord Howe, then Foreign Secretary, could have chosen 002 but, with his usual humour, chose instead 007. When he gave his passport to the officials at Beijing airport, it met with a flurry of excitement. The official in charge called all his colleagues over to see this mild-mannered Welsh gentleman who had a licence to kill. However, he was allowed in and led us extraordinarily well.
	The starting point for this debate is, as the noble Lord, Lord Teverson, mentioned, the consensus-across all international and national studies-that China is the new colossus. The only difference is over the degree of the Spenglerian relative decline of the West and, perhaps, the pace of the change and whether the US global influence has not declined as rapidly as some claim, as Professor Nye has argued.
	There has been an amazing transformation, as the noble Lord has no doubt seen on his regular visits to China. When I went on holiday to Shanghai with my wife, I recall gazing around open-mouthed at the general prosperity. I think at that time almost half the tall cranes in the world were in Shanghai, building those vast edifices. The giddy pace of development is likely to continue, in spite of the downside of increased pollution, which affects Hong Kong, the demographic problems and the problem of uneven development. Shanghai is not the whole of China. As the noble Lord, Lord Teverson, said, we must understand the difference of implementation in the several provinces. I always get this wrong, but it is said, "The mountains are high and the emperor is far away".
	How do we in old Europe-since the European Union is China's largest trading partner and overseas market-respond to these changes? I served on the European Union Committee. I confess to being, at first, a little sceptical about the subject that we had chosen. Was it too big? Had there been too many reports from other groups? Where would our value-added be? However, I hail the result, even if it is necessarily broad. I particularly congratulate the noble Lord, Lord Teverson, and Kathryn Colvin, our clerk. We were also well served by Dr David Kerr, our specialist adviser.
	When I chaired the Foreign Affairs Committee in the other place, I tried always to ensure that we spoke not only to government and parliamentarians but to a wider audience, including the think-tank world. I believe that this report does just that. I am pleased that we also had our report noted in the European Parliament. I know that the noble Lord, Lord Teverson, has been invited to address the European Parliament's human rights committee on, I think, 15 July, which shows that we are, quite properly, read by our partners in the European Parliament.
	Because of the speed of transformation, we need constantly to examine our policies. For example, in the current climate, even when DfID's expenditure is ring-fenced, is DfID doing exactly as it should? Where are the respective responsibilities of national Governments and the European Union? Has China adjusted to its new weight and responsibility? Rather incredibly, China still wishes to be seen as a developing country and, as we saw at the Copenhagen climate change conference, throws its weight along with the other developing countries, even if their interests may somewhat diverge. Is China now more of a status quo power? Is it prepared to play a responsible role in international affairs? The noble Lord, Lord Teverson, mentioned some pointers. I mention Operation Atalanta, in which a Chinese vessel is involved, and, as we see in Appendix VI of the report, the way in which China is playing a significant role in UN peacekeeping operations.
	We are on the eve of the UN Security Council decision on new sanctions for Iran. In spite of China's reservations, its declared policy of non-interference in the internal affairs of other countries and the significant oil trade between it and Iran, it seems pretty clear that it will vote with the other members of the Security Council on the new sanctions package. However, looking at Chinese history, geography and its interests, we have to accept that those interests will, not infrequently, not coincide with our own, so how does the European Union relate to the new China?
	Our report asks how China sees us. Clearly, China has difficulty understanding the complexity and uniqueness of the European Union. At one stage, it hoped that the Union would develop into a united states of Europe, a federation to which it could relate and which would act as a counterweight to the hegemon so often criticised by China-the United States. At others, it has concentrated on individual states, having, as the noble Lord said, had a rude awakening as to the nature of the European Union and our close relationship with the United States in 2003 during the arms embargo saga. On several occasions China has sought to play off one European country against another. It is sad to relate that we have often been prepared to play its game, as was shown in respect of the Dalai Lama.
	Much foreign policy comprises international trade policy, which is where the European Union has a key role. I hope that the Government will see clearly that there are areas where we have substantial clout as a member of the European Union that we would not have on our own, particularly as regards specific trade issues, be they counterfeiting or the lack of licensing agreements within China. I hope that the Minister will say how the Government see the European Union's External Action Service working. It is suggested that there is currently a great dispute over the senior appointments, rather like cats in a sack, and that the new action service will not come into operation at least until 1 December. What will be the relationship between the British and EU representatives? I hope that there will be an increased complement of European officials in Beijing. It is absurd that there is now only one full-time EU official there concerned with human rights. We suggested that the European Union should have more widespread coverage within China. I hope that that will not be affected by financial cutbacks. It may well be that, as the Foreign Office looks around for savings in our external representation, we shall find scope for collocation of consular premises in different parts of China with the European Union, for which there should surely be no objection in principle. It would be helpful to know how the Foreign Office and the Government now see the scope for working together with the European Union's External Action Service.
	On human rights, much wisdom has already been expressed. We recognise that there is no early prospect of a western-style rule of law. We also recognise that, if we want results, we should not megaphone our Chinese colleagues but instead, as the noble and learned Lord, Lord Howe, said, deal sensitively with them. I believe that we achieved certain results by leaving with our Chinese colleagues lists of sometimes forgotten Catholic priests who were languishing in different parts of China and who, even though nothing happened immediately, we understand were eventually released.
	Although there is some scepticism about the EU/China dialogue on human rights, one has to ask what the alternative is. Indeed, we can concentrate on areas where progress can be made, such as legal reforms, the way in which the prosecution is handled, the rights of defendants and so on. We should press the Chinese to ratify the International Covenant on Civil and Political Rights. We should also note Chinese concern about the western reaction to events in Xinjiang, where, rather insensitively, the western press responded in a one-eyed way, forgetting the atrocities on the Han population in the capital at that time. Over the longer term, we have to work very closely with the Chinese. In terms of student exchange, more than 112,000 Chinese students are in the EU at the moment and, as the noble Lord, Lord Teverson, said, we have to encourage greater EU interests in China.
	Much has been said about China in the world. It is gradually adjusting to a global role, as one saw at Copenhagen, and that is now most notably seen in Africa. There are many examples of infrastructure projects for mining rights: platinum in South Africa, iron ore in Sierra Leone, oil in Sudan and so on. There are proper western concerns about transparency, human rights, the increase in debt and training local people, yet the IFC-an arm of the World Bank-has recently, for the first time, financed Chinese investment in Africa and has sought to add human rights and environmental conditions to the offer. One should look for trilateral co-operation between the African Union, the European Union and China. In spite of those concerns, surely Chinese investment is to be welcomed. There is room within Africa for us all. Certainly, African leaders are pleased and there is scope for greater co-operation.
	In conclusion, in disputes such as this, there are no partisan differences. I hope that the Foreign Office will respond speedily to the report, as it has promised. Because there are no real differences, I hope that the Government will reply well before we go into recess in July so that we can give the matter consideration. The Government, and certainly the Conservative component, should surely recognise that the European Union is a key instrument in furthering our own national interests and that policy is evolved at all levels-in Brussels and through regular contact between missions en poste. We should seek to understand the problems but also to relate to, channel and co-operate with our Chinese colleagues on a basis of mutual trust. I believe that our report will have made a contribution to that trust and to a greater understanding.

Lord Hannay of Chiswick: My Lords, the former Prime Minister of China, Zhou Enlai, is recorded as having replied to a question about the consequences of the French revolution with the lapidary statement, "Too soon to say". One could well say the same of the direction and destination of the relationship between the EU and China.
	The Chinese have a marked habit of taking the long view of their geopolitical relationships with other parts of the world. We Europeans have a tendency to take an excessively short-term view of such relationships. So it is very desirable, from time to time, to stand back a bit and look at the relationship between the EU and China in the round. I therefore congratulate the noble Lord, Lord Teverson, and my former colleagues on Sub-Committee C of the EU Select Committee, on providing us with this timely and thought-provoking report which provides an opportunity to do precisely that.
	I shall, if I may, go back to the beginning of the EU-China relationship some 35 years ago last month, not just because I was present at the creation but because it contains some useful lessons for the present day. It also provides me with the opportunity to pay tribute to the former Leader of this House, Lord Soames, for whom I worked at the time in the European Commission and without whose skill and flair the entirely new relationship between the European Community and China that emerged following his visit to Beijing in May 1975 would not have developed so rapidly, so smoothly and so constructively.
	The Europe from which we travelled then in 1975 was at that time in some considerable disarray. There was a leadership vacuum following the death of President Pompidou and the departure from office of Messrs Heath and Brandt. Europe's economies were wracked by high inflation and high unemployment following the Yom Kippur war and the quadrupling of the oil price. China, too, was in turmoil with Zhou Enlai and Mao in their final days and the "gang of four" just around the corner. But that did not prevent the establishment of diplomatic relations being agreed and it did not prevent the foundations of the first EU-China trade agreement being made, both of which developments survived all the subsequent upheavals and blossomed into the much more elaborate and multifaceted set of relations described in the report that we are debating.
	We should not be overly concerned if the short-term prospects for that relationship are currently not particularly brilliant, nor should we draw too drastic conclusions from Europe's current leadership vacuum and the preoccupation with its internal problems, which is certainly leading to some expressions of frustration on the Chinese side and to a number of derogatory remarks about the waning importance of the relationship.
	Why do I take the view that this relationship is so robust and durable, other than the elements of history that I have recounted and which rather demonstrate that? Basically, both sides have substantive and different reasons for ensuring that it remains. There is no parallel here at all for the EU's rather fraught and unsatisfactory relationship with Russia. The Soviet Union, and now Russia, have consistently had as a guiding principle of their relations with the EU and its member states the policy of divide and rule. While the Chinese are not averse from time to time to playing off one member state against the other in an opportunistic way that is not the guiding principle of their attitude. Quite the contrary. From the very outset they have wanted to see a Europe working together and playing a more significant role in the world. They do so not out of any starry-eyed belief in European integration but because they see Europe as one of the constellations in a multipolar world which revolves around the middle kingdom-their picture of a desirable balance of power. They recognise that in the trade policy field, which matters a lot to them, Europe on the whole speaks with a single voice and acts as a single unit.
	From the European perspective, which is a completely different one, effective multinationalism is one of the guiding principles of our common foreign and security policy. That means that we are working for an increasingly rules-based international community because it is in our interest, as well as that of many others, to do so. But we cannot have effective multilateralism without the active co-operation of China, with its veto on the UN Security Council, its membership of the G20, its leadership role among the G77 developing countries.
	Getting China to co-operate in achieving effective multilateralism is, of course, no easy matter. There clearly are tensions in Chinese foreign policy between a trend towards nationalism and mercantilism on the one hand, and on the other a trend towards playing a full and responsible role in the search for global solutions to global problems. In joining the World Trade Organisation, and in accepting its fully rules-based approach to trade policy, the second trend has been clearly dominant. In dealings over Burma, Zimbabwe and Darfur, the first trend has so far prevailed. Over North Korea, the Chinese have sat on the fence but they may not be able to do so for much longer. However, one thing is very clear: we shall not achieve our objective from this relationship-the objective of effective multilateralism with the Chinese co-operating fully-if we do not make full use of the toolkit provided by the Lisbon treaty. I was glad to see that point brought out in the report we are debating, and today by the noble Lord, Lord Anderson.
	Should we be worried about the possible emergence of a G2, which is a kind of shorthand for a Sino-US directoire ruling the world, to which the noble Lord, Lord Teverson, referred in his opening remarks? I do not myself believe so. For one thing, neither the US nor China seem to me to be prepared for or to want the kind of structured, systematic, all-purpose relationship that a G2 would imply. No doubt, from time to time these two countries will strike deals and that will affect us and many others. But we really should not fret that these two countries bulk so large in each other's foreign policies. They have done so for 40 years now and they are going to continue to do so for the foreseeable future. That has not been, and should not be, seen as an obstacle for a healthy and expanding EU-China relationship.
	I believe therefore that we should be relatively optimistic about the prospects for EU-China relations. On my analysis, we are working with the grain of the two parties' fundamental interests. Whether we succeed in building successfully on that foundation depends every bit as much on us as it does on the Chinese. So far, we have not been terribly effective at doing so. But we cannot afford to give up, or to fall back on a network of bilateral links between China and individual member states which will never maximise our influence or successfully further the protection of our interests.

Lord Inglewood: My Lords, for me, one of the best brief general descriptions of western Europe's relationship with China appears in the opening paragraph of The Chan's Great Continent, written by the great Chinese observer, Jonathan Spence. He writes:
	"One aspect of a country's greatness is surely its capacity to attract and retain the attention of others. This capacity has been evident from the very beginnings of the West's encounter with China; the passing centuries have never managed to obliterate it altogether, even though vagaries of fashion and shifting political stances have at times dulled the sheen. The sharpness of the feelings aroused by China in the West, the reiterated attempts to describe and analysze the country and its people, the apparently unending receptivity of Westerners to news from China, all testify to the levels of fascination the country has generated".
	When I first became involved in China, just over a decade ago, when to my unexpected delight I became vice-president of the European Parliament's China delegation, I was dazzled. At that time, I spoke to an older and wise friend, a considerable China scholar who in a diplomatic capacity-not, I would mention, in a UK diplomatic capacity-spent a number of years in the country during and after the Cultural Revolution. Her reply was, "Don't be distracted by the exoticism: focus on the rational". The problem we face is that we may not fully understand what the Chinese want, since their historic and cultural framework is not the same as ours.
	A good example of that has already been alluded to in this debate-the Chinese attitude to human rights. As we all know, in the Chinese hierarchy of values, human rights are different and less important than they are to us. I expect that not only everyone in the Chamber but many Chinese people themselves believe that the Western hierarchy of values is right but, as has already been mentioned, to influence human rights in China, we need to appreciate that our values and theirs may be different. The arguments that we think are self-evident are not necessarily those which will persuade those whom we wish to change. We must deploy the arguments that are potent to others if we wish to bring about change. The report is absolutely right about that.
	Equally, the concept of the rule of law is subtly different. It is not law quite as we understand it because ultimately, in China, the law is an expression of policy and the Executive's aspirations-in much the same way as the National People's Congress is not quite the same as Parliament here. In my judgment-I strongly echo the sentiments expressed by my noble and learned friend Lord Howe-we in this country and western Europe have not placed as much emphasis on legal education and the development of legal studies in China as we might have. We have missed a trick in that regard. Had we done as much in respect of legal education as we have in trying to introduce business education to China, we would have achieved more than we have.
	China has a very clear historically based perception of itself. Whether one agrees or disagrees with it, it is understandable within the framework of the way in which constitutional arrangements have evolved in the East. They may be expressed in terms of international law, which is, after all, a western European concept but, underneath that, there are slightly different eastern ideas. For example, I do not think that the Chinese treatment of Tibet and the Tibetans is in any way proper or justified, and I am no apologist for it, but I can see how, from a Chinese perspective, the Chinese have reached their justification for what they have done. We are not doing the Tibetans any favour by not being clear about that. Indeed, the Dalai Lama's attitude towards the independence of Tibet suggests that he shares that view.
	Against the background of a "one China" policy, combined with a "one country, several systems" approach, we can see how the approach is being allowed to evolve to the People's Republic's advantage. It has the potential to provide considerable benefits, and may well do so in future, especially in respect of Taiwan, Tibet and even bits of what are now integrally part of what is more generally considered to be single China-say, Shanghai or Shenzhen. That constitutional approach may seem somewhat perverse to those of the European Union-especially, I suspect, to some in this country-but there is nevertheless a clear logic to what is going on which we ignore at our peril.
	We need to be equally clear about the destructive character of the previous century in China which has, from its point of view, been more or less one continuous civil war. In particular, the Cultural Revolution will have had a considerable impact on the Chinese leadership. Understanding their economic policies must be based on an appreciation that they are trying to pursue the antithesis of the destructive chaos that swept that land over most of the past century. In particular, they are looking for stability and good fortune. I suppose that we would describe good fortune as getting richer. After all, in the 19th and 20th centuries, China in its historic context was politically at a very low ebb and was a demoralised great power. The wealth in the world was being created in the West and the Chinese, understandably, wanted to engage with that and participate.
	Under the administration of a one-party system speaking the liturgy of Marxism with Chinese characteristics, we have seen a Chinese attempt in the World Trade Organisation, for example, and in how it has been behaving in the international monetary markets, to try to return to its rightful position as a great power. That will not necessarily be to our advantage in the immediate or the longer term, but from a Chinese perspective, I can see precisely what they are trying to do. It is also interesting to see our reaction in the West to what has been going on in this context. It has put into stark perspective the issues that are thrown up by how Europe should retain its economic competitiveness. This has been a subject of considerable debate, not least in this Chamber, and it will, no doubt, continue to be one.
	How is China looking at the wider world? Is it striving for a tripolar world of the US, China and the EU, a bipolar world or what? Indeed, it is not clear to me what the European Union wants, and it is certainly not obvious what the evidence of the EU's external policy may be saying to the Chinese. As was pointed out in the report, Chinese puzzlement seems to be entirely justified. It is arguable that it is we who are in a muddle about this.
	One of the most important things emerging from this report is that it highlights a couple of issues that arise from looking at the EU/China relationship. They are some of the biggest issues facing western Europe and the European Union. How do we deal with questions of competitiveness and in what way does the European Union's diplomatic mission and approach go forward? There is a difference between many in this country and the European Union of which we are part. The same disagreement is to be found among some other members of the European Union. Since those disagreements are not necessarily about the same things, it seems to me that we have to focus very hard to work out what we collectively want in these circumstances.

Lord Clement-Jones: My Lords, I declare an interest as vice-chairman of the All-Party China Group and as a partner of the law firm DLA Piper with responsibility for international business relations in China, Korea and the Middle East. As a very regular visitor to China, I think that this is an extremely welcome and thought-provoking report. I congratulate my noble friend Lord Teverson on his opening speech and him and his colleagues on an extremely well put-together report.
	The report quotes Vice-Minister Zhang Zhijun and Dr Kerry Brown and, as China watchers will know, that means that the report is balanced and authoritative and gives two interesting sides of the equation. The report is right to treat China as a major EU priority in foreign and trade policy. China has swiftly returned to double-digit growth and will overtake Japan later this year to become the world's second-largest economy. Essentially, this is seen from the Chinese perspective as a rightful re-establishment of China's position in the world, as I am sure many noble Lords will know. In terms of bilateral relations, the report rightly concentrates more on what the EU should do than on what China should do. There is nothing worse than preaching at China, as a number of noble Lords have said.
	Seen from the Chinese perspective, China faces many major issues, which are inherently difficult and full of paradox. They include: keeping the value of the renminbi competitive in the face of a massive surplus and rising costs, because the future of the Chinese export economy is at stake; the recent suicides at the major supplier Foxconn; and the Honda strike in China, which will have an impact on labour costs. Many other factors may lead to higher costs, particularly in the east of China. There is a desire in the Chinese Government to move from an export-led economy to a more consumer-based economy, while controlling domestic inflation after the success of the economic stimulus package, but that will not be easy with double-digit growth.
	There is a need to grow and create a massive number of jobs each year just to cope with new graduates, while improving the protection of the environment and moving to a low-carbon economy at the same time. How can the Chinese extend local autonomy at county and provincial level, as they wish to do, and satisfy demands for more human rights generally-and in Xinjiang and Tibet in particular-while maintaining political stability, one of the cardinal objectives of Chinese policy? In the education system, how can China deal with the dilemma of encouraging greater creativity in the face of a traditionally prescriptive teaching method at all levels? How can it ensure proper intellectual property protection without, as it sees it, overpricing legitimate consumer expectations? How can it ensure Chinese influence over natural resources, particularly in Africa, without being accused of employment malpractice?
	In many of these areas, we want China to do more to satisfy western government expectations, but China rarely responds to external pressure. It is much more sensitive nowadays to domestic public opinion, particularly as it is expressed through the internet. Much will depend on the relationship that we manage to build over time and on whether any move meets the essential criterion, which I repeat, of retaining and delivering the cardinal virtue of political stability.
	The relationship will have its ups and downs and, in the past year in particular, there have been quite a number of downs. What do the Chinese Government seek to derive from their relationship with the EU? Of course they want trade, technology transfer and investment. These are a cornerstone, as is the education link, but crucial to real progress, in China's view, is support for market economy status for China and lifting the arms embargo.
	On the market economy status, China still thinks that the West is not playing by the rules and is adopting double standards. Why should Russia have market economy status but not China? Why have some 97 countries given market economy status to China, while major economies such as the EU, the US and India have not? China also considers that it has been subject to an unjustified barrage of anti-dumping cases. Above all it believes-the report makes this quite clear-that the EU speaks with different voices. Chinese leaders express genuine frustration at the multiheaded European leadership structure and the lack of a single voice. This, I believe, is genuine and, like the committee, I do not accept the Fox/Godement thesis mentioned in the report that China is intent on playing one EU country off against another or, indeed, that there really has been a practice of unconditional engagement on the part of the EU.
	China sees the US/China interface as much preferable, because it can get answers and decisions that stick. Unless we are to play second fiddle in every case to the US, the EU needs, as my noble friend's committee's report points out so eloquently, to get its act together. One of the questions is whether Europe takes a lead or simply follows the US. This is particularly acute in respect of both the arms embargo and the MES. I shall be interested to hear what my noble friend has to say on this subject at the end of the debate.
	There is much to be done, but the Lisbon treaty has improved matters somewhat. I have great respect for the EU's High Representative for Foreign Affairs and Security Policy, our colleague the noble Baroness, Lady Ashton, whose trip to China earlier this year was well received and made the Chinese Government feel that progress was possible with the EU. I am therefore optimistic that we can make progress.
	At the end of the day, there is the question of what we can expect from China as a superpower. The former ambassador, Madam Fu Ying, was fond of talking about how the Chinese see China from the inside as a mouse, whereas we on the outside see it as an elephant. Of course there is a big gulf between the way in which China is perceived from the inside and the way in which it is perceived from the outside. There is growing evidence of a more actively interventionist approach, but China still lacks the confidence that it really is the superpower that we think it is. There was greater engagement at Copenhagen, even if it was not seen as satisfactory from an EU point of view. As the noble Lord, Lord Anderson, mentioned, the agreement over Iran sanctions could prove extremely important. Above all, I believe that the role played by China at the G20 last year was extremely constructive. In the EU we should not be afraid to bargain. If that is done coherently, we can exploit our technologies, our creativity, our education and our research quality. In key areas such as trade policy and climate change, we need to agree strategies within the EU and to speak with one voice, which is the welcome message of this report.
	What of Britain's role? As my noble and learned friend Lord Howe pointed out, there is a long history between us, which is still regarded as important by the Chinese. Our ambassador is one of only five vice-ministerial ambassador posts. Ambassador Liu Xiaoming continues this pattern. I recognise the achievements of the previous Labour Government in having established relationships with China on a firm footing. I believe that the successful Hong Kong handover had a major impact and was beneficial for our relationship. I also welcome the desire of the coalition to have closer relations with China, as set out in the coalition agreement.
	However, both our parties are a relatively unknown quantity to the Chinese Government. I hope that a high-level visit by the Prime Minister or the Deputy Prime Minister will take place soon, perhaps coinciding with the close of Shanghai Expo. The Chinese have many matters in common with Britain. Belief in free trade above all is the link, as well as an admiration for our higher education system. None the less, Britain is still underperforming in trade and investment flows. France and Germany in particular outperform us in energetic trade promotion. However, perhaps our salesmanship is entering a new era. Out cultural diplomacy seems to be improving by leaps and bounds. The Shanghai Expo pavilion is evidence of that. The Chinese are taking genuine pleasure in the success of the pavilion designed by Thomas Heatherwick and have taken very much to heart what they call the "Dandelion". UKTI deserves huge credit for having the imagination to deliver a strikingly original symbol of British creativity at Expo. I hope that we will celebrate the way in which Britain can help the EU's objectives in its relationship with China.

Lord Crickhowell: My Lords, our sub-committee was well chaired by my noble friend Lord Teverson, who introduced the report clearly. First, I should like to express my thanks to Kathryn Colvin, our admirable clerk, and all those who helped us to prepare that report. It was a very big job, which was well done. I was one of the sub-committee members fortunate enough to go to China. We went 25 years after my last visit, during which I had watched on Chinese television the signing of the Hong Kong agreement. The fact that my noble and learned friend Lord Howe of Aberavon, present at that ceremony and playing a central role, has been able to contribute to this debate, and give a very personal account of involvement with a changing China over more than half a century, has been very welcome and is a good example of the unique quality of this House.
	The transformation of China during the 25 years since I was there has been remarkable. On my previous visit, we travelled to the old city of Beijing from a very simple government guest house along a bumpy, unlit road, which was hardly wide enough for two vehicles to pass, to a city where there were few cars but thousands of bicycles. Beijing, Guangzhou and, I believe, the even more spectacular Shanghai, which we did not visit on this occasion, have taken their places among the world's great modern cities. The bicycles have given way to a vast number of motor vehicles which choke the huge highways that have obliterated the old buildings. Perhaps even more significant than the construction programmes is that people's lives are better than they were. They have improved in terms of disposable income and economic and job choices, and with those improvements have come greater freedoms.
	It was not just the scale of the development taking place that struck me so forcefully on this visit, but the changing character of the political leaders of modern China. We had meetings with men I can best describe as old fashioned commissars. They were not very productive meetings because our attempts to intervene with questions seldom generated helpful responses. On the other hand, we had meetings with two senior vice-Ministers, Liu Jieyi and Zhang Zhijun, who were the kind of men one would expect to find holding with great distinction senior positions in government, business or academia around the world: informed, perceptive and intellectually of the highest calibre. They were prepared to give us shrewd personal judgments and observations while they also clearly set out their Government's official position. We met a number of people from the universities and think tanks who impressed us in a similar way. With men and women of this kind increasingly taking leading roles in China, I find it hard to believe that the country will not undergo fundamental changes quite quickly.
	Having said that, there are some issues about which even the most creative and flexibly minded Chinese are unbending. In the report we describe them as China's "lines in the sand". First, China will not accept any questioning of its territorial integrity, whether over Tibet, Hong Kong or Taiwan. There are signs that both Taiwan and China are feeling their way towards better relations within the One China concept, and my noble friend Lord Inglewood had some wise words to say on that topic and how it might, in the future, be the way through for Tibet as well.
	The second immovable line in the sand is China's need for development and economic growth. The Chinese Communist Party depends for its legitimacy on guaranteeing prosperity for its citizens. No other policy area will take precedence over the need for continual growth and all EU policy has to recognise this immovable fact. Because of China's need for the natural resources that it does not possess, it will continue to extend its supply contracts and involvement in Africa and other places where its needs can be met. That will have implications for Europe.
	Chinese attitudes to government and democracy have a good deal more in common with imperial administration developed over the millennia than to communism as it has been generally practised. As one witness, Dr Steve Tsang, put it, the party,
	"has imposed what amounts to a social contract ... the Party delivers stability, order, rapid growth and general improvement to the living conditions of the people in return for its continued dominance".
	Despite the achievement of amazing levels of growth and the prosperity of the coastal areas, we were repeatedly reminded that China sees itself as a developing nation with a high proportion of its vast population still with some of the lowest incomes per head in the world.
	The EU is China's largest trading partner. That fact provides a central reason for each wanting to understand and have good relations with the other. The noble Lord, Lord Mandelson, told us that the EU has huge leverage because Europe provides the market destination for a vast quantity of Chinese exports, and keeping Europe's markets open to those exports is fundamental to China's economic and political strategy. It was, however, pretty clear from his evidence that, as my noble friend Lord Teverson pointed out, the leverage has not been exercised very effectively. While the UK and the other European nations will have their own policies and compete strongly with each other commercially, it is entirely in the interests of all that the EU should act as one on trade conflicts covered by the WTO, and on the need for China to open its markets more widely and to respond positively to European concerns about intellectual property rights and commercial law. To speak with one voice and to be mutually supportive is equally desirable over human rights, international development, climate change, and in sensitive areas such as the treatment of the Dalai Lama.
	It is equally true that strong European backing for British efforts in Hong Kong is important if the promised implementation of the Basic Law and moves to wider democracy there are to be achieved. Hong Kong is a hugely important conduit for foreign investment into China and the EU needs to reinforce its diplomatic efforts in the Hong Kong SAR.
	Events have moved on since we prepared our report. The euro is under threat, which must alarm the Chinese, and the economic recovery from the banking crisis is far from secure. If some have had doubts about the ability of China to maintain its phenomenal rates of growth in these conditions, events have proved them wrong. While the Chinese authorities are finding it necessary to contain inflationary pressures, the chief executive of HSBC in China says that the financial crisis has only made the country stronger, with its exporters becoming leaner and more efficient. There has been huge investment in new plants and infrastructure and manufacturing is being moved inland to where housing and wage costs are much lower than in the coastal belt. This ability to move to these huge regions where wages are low means that China is likely to maintain its competitive edge for many years to come.
	There has been an unfortunate tendency by some in the EU to lecture China. We are much more likely to make progress, even on sensitive issues such as human rights, by finding those areas in our relations where it will be in China's national interest to change. Nowhere is this truer than on climate change. On re-reading our conclusions on this topic, I doubt that we got the balance quite right. Certainly we must enter the next round of negotiations as a player but I do not believe it is wise to set an example on cuts in isolation. While I differ with quite a lot of the analysis made by my noble friend Lord Lawson of Blaby, I share his view that to impose huge burdens on our own industry which none of our competitors will follow is not the sensible way to proceed. Like my noble friend Lord Jenkin of Roding in speaking on the gracious Speech, I think we need to find a way forward that is politically more attractive and, I would add, economically less masochistic.
	In the Chinese context, that means tough negotiations in which our contribution is realistic and is made as others make theirs and not in advance in the vague hope that they will follow. We need to exploit the fact that while China needs to continue growing, it faces grave threats from climate change. It is threatened with acute shortages of water in some regions and the threat of floods in others. Pollution from its coal-fired power plants is smothering Guangzhou and Hong Kong. Natural disasters when they occur in China tend to be even more devastating than in other countries.
	Those are some of the reasons why China may choose to move further than the pessimists believe, and there are positive reasons as well. China, I am sure, wishes to be a massive player in the developing industry in low-carbon technology. There is real scope for Europe and China to co-operate in this vital area, despite fears about transferring technology without better licensing. The successful development of carbon capture technology is hugely important for both Europe and China, and particularly important for this country. The lack of urgency or drive in taking forward the joint carbon capture and storage project represents a shocking failure of EU policy.
	I shall make three other brief points. First, as already referred to by my noble friend Lord Teverson, the formal exchanges on human rights are more ritualistic than effective, but we found that real progress was being made in different parts of China, with lower profile rule-of-law and civil-society projects. Here we are working with the grain in areas which are entirely in China's own interests.
	Secondly, I draw attention to paragraphs 146 and 147 of our report about the caution that needs to be exercised in sharing some technologies with China and the need for close co-operation with the United States and NATO on the subject of cyber technology, in particular, and the possible need to take strong countermeasures if our interests are threatened.
	Thirdly, it is important that we continue to encourage far more of our own citizens to obtain real knowledge of all aspects of modern China, including, of course, its language. My noble friend Lord Sassoon, in a notable maiden speech winding up yesterday's debate on UK competitiveness, commented that it is easy to be complacent about the language question. I am sure that he was right. Those vice-Ministers to whom I referred knew and understood our culture and institutions so much better than most European politicians know or understand theirs; perhaps that was one reason why I found them so impressive.

Lord Alton of Liverpool: My Lords, Stars and Dragons: The EU and China deserves to be widely read. It is a comprehensive and engaging report to which the noble Lord, Lord Teverson, did great justice in his introductory remarks.
	Paragraph 43 of the report rightly states:
	"It is unrealistic and undesirable that a single EU-China relationship will replace relations between China and individual Member States. The two will rightly continue in parallel".
	There is a great deal that is unique in the extraordinarily rich and historic relationship between our two countries, a point touched on by the noble and learned Lord, Lord Howe of Aberavon, in his wise and penetrating speech. There is also much in our contemporary relations that remains unique. We must not sublimate those interests in the desire always to hunt as a pack. I shall talk about China and her relationship with the United Kingdom and China's domestic challenges.
	Ambassador Liu Xiaoming, China's new and accomplished ambassador to Britain, presented his credentials on 26 May. When diplomatic relations were established 38 years ago in 1972, bilateral trade was worth just $300 million. Last year, it was worth $39.1 billion, a theme addressed in chapter 6 of the report. Thirty-eight years ago, there were just a few dozen Chinese students in the United Kingdom; today, their number has reached 100,000, our largest source of overseas students. Thirty-eight years ago, a meagre 1,000 people travelled between China and Britain every year. Today, each and every day, thousands of visits are made, with 200,000 Chinese tourists visiting the UK last year.
	On coming to office, the Prime Minister, Mr Cameron, rightly made one of his priorities a telephone conversation with premier Wen Jiabao and the Foreign Secretary, Mr Hague, spoke to his opposite number, both discussing the further expansion and advancement of the China-UK strategic partnership and looking at ways of developing that vital relationship further.
	The oldest Chinese community in Britain outside London is to be found in Liverpool. My first visit overseas as a young Liverpool MP was to stay with Chinese families in Hong Kong. Two years later, I travelled to mainland China, to Shanghai, which the noble Lord, Lord Anderson of Swansea, mentioned. I met some of those to whom he referred who had suffered grievously for their religious faith. It is significant that only yesterday, and I welcome it warmly, the authorities in Beijing recognised the underground bishop, Matthias Du Jiang, as Bishop of Bameng in Inner Mongolia. I also mention the constructive role played by Ma Yingling of Yunnan, one of the remaining bishops of the official church yet to be recognised. Last year, I met the Bishop of Beijing, now officially recognised by both Rome and Beijing. Anyone who has followed the issue touched on by the noble Lord, Lord Anderson, and how, for instance, Cardinal Kung, the former Bishop of Shanghai, was imprisoned for more than 30 years, knows that these are historic, momentous, significant developments which we should all warmly welcome. That is not to say that there is not still much to be done; indeed, there are several underground bishops who remain in prison as we meet today. However, we should not underestimate the changes that have been under way. The scars of the years of the Cultural Revolution, to which the noble and learned Lord, Lord Howe, referred, are healing. China has made many fundamental changes, but it is a great work in progress and, economically, it has undergone an extraordinary transformation-and that we must admire.
	In 1999, Liverpool twinned with Shanghai, which opened the way for commercial and entrepreneurial opportunities for both cities: commerce, development and jobs. Perhaps every town in Britain should consider twinning with a city or town in China. Liverpool's story is a good illustration of the benefits of good fraternal relations. It had many reasons for twinning with Shanghai; it shares many characteristics with Shanghai, not least the architectural similarities between the waterfronts. Shanghai, of course, has grown exponentially, with a population of more than 21 million people, and a stock exchange of 74 million investors, but the two cities retain many similarities, including the waterfronts, maritime industries, football, and a history of innovation and change.
	The relationship between the two cities has prospered so much that Liverpool was invited to participate at no charge at Expo 2010, to which the noble Lord, Lord Clement-Jones, referred, which began in May and ends in October. China's expo is four times larger than any previous expo and is expected to attract around 70 million visitors from 140 countries. The Liverpool team running the Shanghai pavilion tells me that an average of 3,000 people come to its stand each day, with as many as 5,000 people at the weekend. From all this, I hope that both cities and both countries will see Expo 2010 as an opportunity for even closer economic and commercial relationships and inward investment, along with more educational exchanges and tourism. Here I declare an interest, as I hold a chair at Liverpool John Moores University. Education should be a two-way street. I should like to see more of our students travelling to China with Mandarin and Cantonese more widely offered in our schools and universities.
	None of these positive developments should occlude the way in which Britain is still perceived by some Chinese-and I would like the report to have touched on this. One hundred and fifty years ago, on 18 October 1860, at the command of Lord Elgin, Britain's High Commissioner in China, one of the most shameful episodes of British history occurred: 3,500 British and French troops torched China's Old Summer Palace in Beijing-the Gardens of Perfect Brightness. It was a vindictive and philistine act which aimed to humiliate China's Qing Dynasty and assert the hegemony of the British and French occupying forces. Its consequences still reverberate today, and it is another of those unforgotten and unhealed chapters of history.
	The burning of the palace was the culmination of the second opium war, waged by the British in China, a war whose lessons have contemporary resonance. The French writer, Victor Hugo, in his Expedition de Chine, described the pillaging and burning of the palace as akin to two robbers,
	"breaking into a museum, devastating, looting and burning, leaving laughing hand-in-hand with their bags full of treasures; one of the robbers is called France and the other Britain".
	So what was Britain's objective in pursuing the second opium war-or arrow war-of 1856 to 1860? The pretext which was given was the killing of a French missionary, Father August Chapdelaine. In reality, the British Empire and the Second French Empire pitted themselves against the Qing Dynasty with the objective of legalising the opium trade and expanding the trade in coolies-a derogatory slang expression used to describe the virtual slave labour and exploitation to which Chinese labourers were subjected. The trade in coolies was the forebear of the human trafficking which continues to this day. Along with the opium trade and the trade in people, Britain was determined to open up all China to British merchants. The opium war concluded with the British, French and Russians demanding and getting a permanent diplomatic presence in Beijing. China was forced to pay reparations of 8 million taels to Britain and France. Britain acquired the territory of Kowloon, adjacent to Hong Kong, a territory taken at the end of the first opium war. The opium trade was made legal, and Christians were given the right to evangelise-a sad and discrediting linkage of religious freedom to the worst excesses of imperialism.
	Most scandalous of all was the trade in opium itself. Vast numbers of Chinese had become addicted to opium and Britain, instead of helping to eradicate the addiction, became the supplier. The Chinese Government said:
	"Opium has a harm. Opium is a poison, undermining our good customs and morality".
	Instead of upholding China's policy, however, Britain decided to play the part of pusher and profiteer-the equivalent of today's urban heroin and cocaine pushers, not only government-sponsored and sanctioned but backed by force of arms. In the House of Commons, the young William Ewart Gladstone rebuked the British Government. He said,
	"a war more unjust in its origin, a war more calculated to cover this country with permanent disgrace, I do not know".
	By the conclusion of the second opium war and the burning of the Old Summer Palace, Britain had achieved its strategic objectives but its reputation was left in the ashes and charred remains of the Gardens of Perfect Brightness. As we approach the 150th anniversary of these events and catch a glimpse of drug addiction, human trafficking, theft, arson, violence and humiliation, we might pause to consider how these unhealed and unforgotten events continue to play into the times in which we live now. As we exhort China to take its place in the world and consider its development role in Africa, which has been mentioned, or how it should be a major broker in countries such as Burma and North Korea-and I hope that that will be the case-we should have regard to how China has traditionally perceived foreign powers, how it has been treated itself and how it sees its own interests.
	Above all, China cares passionately about its own domestic stability. It is acutely aware that social cohesion and stability are two great prizes. How to achieve that without repression is daunting. I shall now say something about China's domestic challenges. On 22 May the Spectator drew attention to the plight of a Beijing academic, Professor Yang Zhizhu, who had lost his job and become an outlaw after refusing to pay a second-child fine of £18,000. At paragraph 15 of its report, the committee rightly draws attention to some of the consequences of China's one-child policy which, it says, has led to,
	"significant distortions in gender and generation balances, with men outnumbering women, and difficulties supporting the elderly, which will affect Chinese views and policies in the future".
	It is estimated that there are now 37 million more men than women. The British Medical Journal says that the overall sex ratio for China is 126 boys for every 100 girls. Nine provinces had ratios of more than 160 boys for every 100 girls, for second children. The article stated:
	"Sex selective abortion accounts for almost all the excess males".
	The Economist described this as "gendercide". This gender imbalance is a major force driving sexual trafficking of women and girls in Asia.
	China also has the highest female suicide rate of any country in the world. It is the only nation in which more women than men kill themselves. According to the World Health Organization, approximately 500 women a day end their lives in China. This extraordinary suicide rate may well be related to the campaign of forced sterilisation and compulsory abortion. I was particularly grateful to the noble Baroness, Lady Verma, who is on the Front Bench today, for the reply that she gave me yesterday to a Written Question, where she said that last year alone £770,000 had been provided by DfID to Marie Stopes International, and that this will be reviewed as part of the process of looking at overseas funding. I would point out to your Lordships that MSI might claim to disapprove of compulsion but recently gave a red-carpet welcome in its London headquarters to Ms Lin Bin, Minister of China's National Population and Family Planning Commission, which is responsible for the one-child policy. I also hope that the noble Lord, Lord Wallace of Saltaire, will be able to confirm that the Government will follow the previous Government in upholding the case of Chen Guang Chen, the blind human rights activist who in the Xiandong province exposed the compulsory abortion and sterilisation of more than 130,000 women and is now into his fourth year in prison for having done so.
	Last year, under the auspices of the All-Party Parliamentary China Group and with the assistance of the Government of China, I was able to organise a small all-party visit by four British parliamentarians-two Members of the Commons and two from your Lordships' House, the noble Lord, Lord Steel, and myself-and we subsequently published our report, Tibet: Breaking the Deadlock, which can be viewed on the all-party group's website. We travelled with the blessing of the Dalai Lama, who, in the aftermath of the March 2008 riots, trenchantly condemned violence as a means of procuring change in Tibet. He has also accepted, as the British Government have done, that Tibet is part of China, but believes that it should be allowed significant autonomy. He has repudiated any return to feudalism and has stated that he is willing to accept a spiritual role, rather than a political one. We concluded that these four principles could form the basis of a firm settlement with the Government of China. The noble Lord, Lord Steel, said to me at the beginning of the debate that he is disappointed not to have been able to take part in it because of commitments elsewhere. If noble Lords look at paragraph 269 of the committee's report where it rightly calls for mutual respect, they will probably agree that terms such as "splittist" and "feudal", which are regularly used to describe the Dalai Lama, do not encourage that mutual respect that we should all try to encourage.
	It is not too far-fetched to consider the making of a religious concordat with the Dalai Lama that sees him as a spiritual rather than a political leader and designates Lhasa's Potola Palace as a holy city, comparable perhaps to the standing enjoyed by the Holy See. Were the Chinese to initiate such a move, it would show a new and welcome openness to the principle that each man and woman should be free to determine the religious belief of their choice. Instead of undermining the unity of the state, invariably the state becomes the beneficiary of the good that religious faith and spiritual endeavour are then free to promote.
	Last year the Lhasa Evening News said that a "strike hard campaign" had been launched. Perhaps a "think hard" campaign would now be more apposite. How much better it would be if the Dalai Lama were invited to have direct discussions in Beijing with President Hu Jintao. The fourteenth Dalai Lama, Tenzin Gyatso, now aged 75, is willing to find a solution and is in a position to make a lasting settlement. His word and his judgment will be accepted by disparate groups of Tibetans. When he dies there will be no similar focus for unity, risking a more radical and intractable conflict. If agreement is not reached during his lifetime, it could leave a dangerous vacuum which could threaten China's cohesion.
	The Chinese ideogram for "crisis" also means "opportunity". There is an opportunity to use Chinese genius, as happened in the case of Hong Kong and is now happening in the area of religious liberties, to find creative and durable solutions to some of the issues that I have touched upon.

Lord Selkirk of Douglas: My Lords, the noble Lord, Lord Alton, has spoken with conviction and clarity. In my speech, I will deal with some of the matters that he has mentioned, but first I should declare a past interest: when I was a student at Oxford University, I visited Singapore and wrote a thesis in the 1960s on the overseas Chinese in Singapore, which dealt with the process of transition from colonialism to self-government. I was particularly interested to discover that the Chinese students whom I met there were extremely proud of the prowess of mainland China and that that pride was accompanied by a great loyalty. This was all the more remarkable to me since Singapore had moved from a colonialist regime towards a democratic one and a thriving capitalist economy. I therefore hoped that one day I would get the opportunity to visit mainland China to better understand its attitude and, more important, to appreciate the constantly growing economic importance of China in the world.
	The most important conclusion that I believe must be drawn from our visit is that the European Union should pursue a wider policy of constructive engagement and develop a collaborative relationship with China. We emphasise that the member states need to decide the key issues on which in practice the EU should stand firm on a united approach. This ought to cover a great many areas, including climate change, co-operation over science and technology projects, Operation Atalanta to prevent piracy and dealing with the enormous trade imbalances between China and the West. We have said that, to add substance to this policy, the EU and its member states should encourage-this is a point that the noble Lord, Lord Alton, made-the study of Chinese languages, culture and institutions within the countries of the EU.
	When our delegation visited China last summer, what struck me most forcefully was the way in which the Chinese Government were geared to obtaining maximum development and economic growth with all possible speed. China has some of the most highly developed cities in the world on its eastern seaboard, but on the other hand, with its 1.3 billion citizens-nearly one-fifth of the world's population-it has a great deal of rural poverty in its vast western areas. The report rightly proposes that the EU ought to establish a stronger presence outside Beijing and Hong Kong.
	The policy of rapid economic development in China has now taken priority over everything else, including issues involving human rights. As my noble friend Lord Teverson said, while China has commendably raised millions of its citizens out of poverty, the Chinese leadership has shown no great enthusiasm for extending democratic rights, and political dissent is quite simply not tolerated. That was amply demonstrated by the events in Tiananmen Square and by China's treatment of Tibet, to which the noble Lord, Lord Clement-Jones, referred. More recently, there was widespread disappointment when a UK national was executed in China on drugs charges despite pleas from the British Prime Minister for clemency. Indeed, I was told when we were in China that the death penalty is still on the statute book for the smuggling of cigarettes.
	I believe that the Chinese Government correctly understand that the EU will continue to assert its deeply held commitment to human rights and will wish to raise such issues in a consistent and practical manner. On this subject, we recommended that the EU delegation in Beijing should consider increasing the number of those working on human rights. However, we should strive to ensure that our approach does not cause other key negotiations on the future of the world's environment and trade to be derailed. It is a difficult and delicate balance to strike, but progress, even if slow, can be achieved on a variety of fronts. In that connection, I strongly endorse the perceptive and far-sighted words of the leader of our delegation, the noble Lord, Lord Teverson, who said on 23 March:
	"It is also important that the EU sticks to its principles on Human Rights when dealing with China, but we feel more progress will be made in this area by pursuing a frank and detailed private dialogue rather than EU leaders grand-standing with public condemnations".
	One reality about China that I knew before I went and was confirmed to me when I was there is-the noble Lord, Lord Hannay, emphasised this in his speech-that the Chinese Government plan on a very long timescale. One distinguished Chinese professor and former ambassador revealed China's perspective when he declared to us that human rights in China had never been better for the past 5,000 years. I therefore fear that human rights issues will continue to be raised by the EU with China for many years to come.
	The second important message that came across to us strong and clear was that China is totally committed to its territorial integrity, to which the noble Lord, Lord Crickhowell, referred in relation to Tibet, Hong Kong, India and especially Taiwan. Our view in relation to Taiwan was that,
	"a military solution must not be contemplated and would lead to severe repercussions".
	Indeed, we describe Taiwan as,
	"a potential flash-point for the whole region, which could bring the US and China into open conflict".
	My conviction is that a possible war over the status of Taiwan would be a disaster for the world, as any such conflict could rapidly escalate. Our report recommends:
	"The EU should state its support for the one China policy but its rejection of reunification by anything other than peaceful means. It should discourage China and Taiwan from taking any unilateral actions that would infringe these principles".
	My final point is that we are having this debate against a background of heightened tensions between North and South Korea. As the noble Lord, Lord Crickhowell, stated, we had a constructive meeting in China on this subject with the Minister of Foreign Affairs and the senior official representing the Communist Party. I express the hope that the Chinese Government will use their good offices to try to bring about a reduction in tension. They have the capability to act as a major restraining influence on the unpredictable North Korean leadership.
	There is no doubt that our report points towards the EU needing to establish an effective relationship with China based on trust and mutual respect. It will be a long road and there will almost certainly be potential pitfalls on the way and perhaps even a few daunting distractions. However, China's illustrious philosopher, Confucius, offers guidance for us all with these wise words:
	"It does not matter how slowly you go so long as you do not stop".
	Perhaps that statement of principle, too, was indirectly recognised in our report-compiled under the able leadership of the noble Lord, Lord Teverson, with the dedicated assistance of Kathryn Colvin and her team-in wanting a long-term dialogue and a policy of constructive engagement by the EU. This evening, I not only commend the wise words of Confucius but strongly support the recommendations in our report.

Lord Faulkner of Worcester: My Lords, I am pleased to follow the noble Lord, Lord Selkirk of Douglas, because I agree with almost everything that he said, particularly on matters of human rights in China and relations with Taiwan. I start by declaring an unpaid interest as the newly elected chairman of the All-Party Parliamentary British-Taiwan Group. I have on a number of occasions had the good fortune to visit Taiwan in recent years and I shall say something about relations with Taiwan in a moment.
	First, I join others in congratulating the noble Lord, Lord Teverson, and his committee on producing such an excellent report and the members of that committee who have spoken in this debate on their contributions. The report is informative, thoughtful and well argued. Indeed, in many respects it is a model of what a good Select Committee report should be.
	I think that the noble Lord is aware of this, because I had a word with him before this debate, but I feel that one thing missing from the report is any detailed reference to the disproportionate and excessive use of the death penalty by the People's Republic of China. I agree completely with what the committee said about the execution of our fellow British citizen, Akmal Shaikh, in December 2009 and I was pleased to see repeated at paragraph 235 of the report the EU statement reaffirming its,
	"absolute and long-standing opposition to the use of the death penalty in all circumstances".
	However, I could see no reference in the report to the annual reports from Amnesty International on the use of the death penalty worldwide, particularly in Asia. The 2008 report on death sentences and executions says that in that year more people were executed in Asia than in the rest of the world put together. It states:
	"At least 1,830 (76 per cent) of all total reported executions were carried out by Asian states".
	Of these,
	"at least 1,718 were carried out in China",
	and,
	"at least 7,003 people were known to have been sentenced to death".
	Amnesty International continues:
	"These figures represent minimum estimates-real figures are undoubtedly higher. However, the continued refusal by the Chinese authorities to release public information on the use of the death penalty means that in China the death penalty remains shrouded in secrecy".
	The report continues with a damning description of how those facing capital charges do not receive fair trials, with failings including the lack of prompt access to lawyers, a lack of presumption of innocence, political interference in the judiciary and failure to exclude evidence extracted through torture. I listened carefully to what the noble and learned Lord, Lord Howe of Aberavon, said and I hope very much that the description that he gave of how things are improving turns out to be the case. In this House, however, where there is such strong opposition to the use of the death penalty, it is right that we should express our concern about the situation that continues to exist in China.
	The use of the death penalty in Taiwan, by contrast, is almost unknown-I cannot say entirely unknown because, regrettably, it was used earlier this year. However, I admit to a sense of disappointment when reading the various references to relations with that country. I had hoped that the committee would have taken this opportunity to question some of the basic assumptions that underlie western Governments' thinking on this matter and recognised that the 23 million people who live in Taiwan also have rights that deserve to be taken into consideration. I refer particularly to the assertions in the summary with the heading "China's lines in the sand". The report states:
	"First, 'one China'. China will not accept any questioning of its territorial integrity whether over Tibet, Hong Kong or Taiwan. It is the Taiwan issue that presents a threat to regional security".
	That sentence has been quoted by a number of noble Lords in this debate. From that, one might assume that Taiwan is somehow threatening its neighbours militarily. That is clearly an absurd proposition. The only threat in the region comes from the People's Republic of China, which has stationed 1,500 missiles on its coastline, all targeted at Taiwan, and has passed an anti-secession law, which, it claims, gives it the right to invade Taiwan if that country declares independence.
	Almost 20 years have passed since the Kuomintang last claimed that it was the legitimate Government of the whole of China and during that time Taiwan has evolved from a one-party dictatorship under martial law into a genuine parliamentary democracy where Governments are changed through the ballot box. I remind your Lordships of what the Foreign Affairs Committee in another place said in paragraph 173 of its August 2006 report East Asia. It stated:
	"We conclude that the Chinese military build-up across the Taiwan Straits threatens peace and stability in East Asia .... We further conclude that the growth and development of democracy in Taiwan is of the greatest importance, both for the island itself and for the population of greater China, since it demonstrates incontrovertibly that Chinese people can develop democratic institutions and thrive under them".
	By contrast-I hope that the noble Lord, Lord Teverson, and members of his committee will not take offence at this-the tone of the report that we are debating seems to be that we must do nothing to promote relations with Taiwan that upsets the PRC. Paragraph 171 of the report states:
	"The EU should continue to support Taiwan in areas which China would regard as non-threatening and should encourage the Chinese to be more flexible, seeking to persuade them that Taiwan's participation in some international organisations, such as observer status at the World Health Assembly, will not damage the Chinese case on reunification".
	If it is right for Taiwan to participate in these international bodies-I would add to that list the International Civil Aviation Organisation, the United Nations Framework Convention on Climate Change, the Inter-Parliamentary Union and others-why should the People's Republic of China be given a veto?
	The case for Taiwan to be given observer status at the World Health Assembly-finally granted in May 2009-was overwhelming because of the significant contribution that the country had made over the years on world health issues such as the SARS epidemic and earthquake relief. If a visitor arrived from outer space and examined the various relationships between Britain and Taiwan-in financial services, in industrial investment by British companies in Taiwan and by Taiwanese companies here, in the provision of places for Taiwanese students at British universities, in collaborating on tackling financial crime and terrorism, in combating disease, in coping with national disasters, and much more-that visitor would come to the conclusion that here were two friendly countries working together closely in virtually every area that mattered.
	However, we know that life is not quite like that. I well recall an exchange in your Lordships' House in January 2003 on a Question that I asked on WHO membership. The noble Lord, Lord Avebury, asked my noble friend Lady Amos, then a Foreign Office Minister, whether she could think of any of the attributes of a sovereign state that Taiwan lacked. Her reply was:
	"My Lords, the noble Lord will be aware that we do not recognise Taiwan. The majority of countries in the UN also do not recognise Taiwan".-[Official Report, 20/1/03; col. 432.]
	That was a truthful answer, but it was not quite an answer to the question that the noble Lord, Lord Avebury, asked.
	However, I pay tribute to the previous Government, whom I was proud to support, for one very important decision that they took in relation to Taiwan. On 3 March 2009, they granted visa exemption for six months to Taiwanese passport holders. We were followed by Ireland and New Zealand, and Taiwan has offered similar rights to British passport holders. There is no evidence that this has created any problems in the countries involved.
	I was interested to see the letter that Ivan Lewis MP, the former Foreign Office Minister, sent on behalf of Her Majesty's Government to the noble Lord, Lord Roper, on 6 April. I am delighted that the noble Lord has been sitting through this debate and is listening carefully to all our deliberations. Paragraph 10 of the letter states:
	"The Government agrees that the EU has a significant stake in the maintenance of cross-Straits peace and stability. In line with the East Asia Policy Guidelines, the EU should continue to welcome positive developments and initiatives aimed at promoting dialogue, practical co-operation and confidence building. It should also encourage both sides to pursue pragmatic solutions to Taiwan's involvement in international organisations, especially where Taiwan's practical participation is important to EU and global interests".
	Perhaps I may ask the Minister a simple question: do the new Government agree with what their predecessors said on that matter?
	I have a couple of further questions for the Minister. The first relates to the EU arms embargo on China, to which the Select Committee report refers. Can he give an assurance that the Government will not support the lifting of the arms embargo until the PRC has abandoned its threatening stance towards Taiwan and has removed the missiles from its coastline?
	Secondly, do the Government stand by what the Minister's new noble friend, the noble Lord, Lord Howell of Guildford, said during the exchanges on the Question to which I referred a moment ago? Speaking from the opposition Front Bench, the noble Lord said:
	"I am sure that we all appreciate that because of respect for the 'one China' policy and our relations with the People's Republic of China, we do not accord Taiwan full diplomatic status. Can we at least be assured that we give Taiwan representatives in our country and the sort of causes that we are discussing in this Question the same support and encouragement as are given by our neighbours, particularly France and Germany, in their dealings with Taiwan? Are we as effective as they are in maintaining good relations with this remarkable democracy?"-[Official Report, 20/1/03; col. 432.]
	His reference to the support offered to Taiwan's representatives in the UK is important. Is the Minister aware that practice differs markedly from one EU country to another in terms of Taiwan's offices' legal status, the immunities granted to their staff, the rules on vehicle ownership, use and taxation, and so on? I do not expect the Minister to give me an answer today, but perhaps he will institute a review of the situation and, where possible, ensure that, where the UK practice is behind that which is followed in other countries in the EU, we will attempt to match that. Perhaps he could write to me about that in due course.
	I thank the noble Lord, Lord Teverson, again for his brilliant introduction. I am grateful to the Minister for his attention throughout our debate and I look forward to his reply. I congratulate all members of the committee on pursuing such an excellent study.

Lord Cobbold: My Lords, I intervene briefly in this debate to congratulate the noble Lord, Lord Teverson, and his committee on an excellent report. European committee reports always achieve a high standard. The only problem with this one is that it is physically difficult to read because of its very tight binding. I agree with the report's principal call for the EU to raise its game substantially and forge a strategic relationship with China based on trust and mutual respect. Like the noble Lord, Lord Alton, I think that one of the most important statements in the report is in paragraph 43. It reads:
	"It is unrealistic and undesirable that a single EU-China relationship will replace relations between China and individual Member States. The two will rightly continue in parallel".
	We in this country already have a special relationship, as many speakers this afternoon have mentioned, because of Hong Kong and, more particularly, the English language.
	I first visited Hong Kong in 1959, but my first visit to the People's Republic was a business trip in 1990. It was a revelation at that time to learn that China's economy had been growing by around 10 per cent per annum since 1979. It was clear that if this rate was to be maintained China would be the largest economy in the world by the middle of this century. In spite of the current global recession, China is still on track.
	On my return in 1990 I went to the University of Hertfordshire, of which I was then a governor. I told the university that it must develop a relationship with China; I am happy to say that it now has around 1,000 students from China. I think there is a total of around 77,000 in Britain and, according to paragraph 50 of the report, as many as 190,000 in the EU as a whole. These are important numbers. Happily, at alumni parties organised by the university in China, graduates have been enthusiastic about their experience in Britain, and have said that it had helped them to get good-quality jobs on their return.
	It is also important to arrange for more education in the Chinese language in this country. I think some of my children and grandchildren are being taught the Chinese language. Education is just one of the many links that we have with China. These links are well covered in the committee's excellent report. My one concern is over the statement in the gracious Speech that the Government look forward to an "enhanced" relationship with India. I have nothing against India, but what about China?

Baroness Kinnock of Holyhead: My Lords, I also congratulate and thank the noble Lord, Lord Teverson, and the members of the sub-committee, who have provided a detailed and persuasive case on how the European Union can better co-ordinate its policies towards China and maximise its leverage over China. Most of the speakers have played around with those points. It remains quite difficult to pinpoint exactly how we will do it but at least we are charting some paths. My one carping observation is that, from the evidence sessions, it is apparent that the committee took no evidence from a single member of the European Parliament on the several visits that it would have made to the Commission. With the Human Rights Sub-Committee, the Development Committee and others there, the committee might have sought that useful contribution.
	The context that we are dealing with in these issues is the increased assertiveness which China is showing. That assertiveness increases the case for a more coherent strategic approach to our relationship with China. On Burma, Iran and North Korea, we know that China has been-and continues to be in most cases-less than helpful. On trade and investment policy, industry and technology, climate change, proliferation and human rights, the European Union clearly needs to refocus more strategically on how it deal with its concerns.
	As the report says, Europe must raise its game. The reality that we have more influence when we work together is well understood in the report. Charles Grant has observed that we should bear in mind that China, as an ultra-realist, respects power. Therefore, uniting European member states are far more likely to have that influence over Chinese policy than we have when there seems to be too much of a focus from many member states on bilateral efforts to build special relationships between them and China. We need to insist, at European Union level through the new high representative and the European External Action Service, that we develop a system of joint messages-with more clarity-from the European Union to China.
	It is also time to end what China clearly perceives as Europe's rather patronising approach to it. Its economy grew by 9 per cent in 2009. For China, this is hardly evidence of any need to emulate our economic model. The European Union must get to grips with identifying the critical issues central to building a more constructive relationship with China. We need, for instance, to promote the objectives of the Doha development round. China is a member of the WTO and has an important role to play. It well understands the need for open trading systems and would look for support on this. There is also climate change, which several noble Lords have mentioned. It means building a consensus at EU level on fewer issues than we currently focus on, and ensuring that our views are clearly understood. We should be clear with China that Europe is ready to do more on such issues as technological transfer, in which China has an interest. We understand the clear benefit for China, and the European Union is ready to be more co-operative and engaged in such issues.
	China regularly expresses its interest in a partnership and co-operation agreement with Europe. However, in reality, as many noble Lords have said, nothing much seems to be happening. We see continuing intransigence on several issues identified in the committee's report. The conclusion is that as China's economic power has grown, our diplomatic contact with it seems more, not less, difficult. China continues to foster relations with developing countries and, increasingly, with authoritarian regimes. Nor do we see many signs that China is keen to integrate further into international systems. In the absence of Chinese support for Resolutions 1718 and 1874 on North Korea, and Resolutions 1737 and 1803 on Iran, the UN's effectiveness was severely diminished by the intervention of China, which voted against these resolutions.
	Europe has limited opportunities at its disposal. However, it has been argued that the tensions between China and the US, and China and its neighbours, must mean that Europe now has a better chance to focus on building that G3 relationship which would be preferable, as the noble Lord, Lord Teverson, suggested, to the G2 relationship which most people seem to think is the likely outcome. This is a critical time for relations with China. The option of working on a G3 relationship is perhaps more possible for us at this time than it has been in the past.
	China has an impressive grasp of public diplomacy, which it has developed with the United States and the European Union. Contrary to the impression that some people have given today, China understands public diplomacy and how to manage it. The European Union has shown an aversion to open and public acrimony between Europe and China because it leads to the judgment that we are failing to handle China. The bottom line is that, like Europe, China needs global trade, monetary standards, security and access to resources. The high representative now has the opportunity to argue for careful policy co-ordination with the United States to use the opportunities that the Lisbon treaty and the European External Action Service have brought about. Insufficient mention is made of that service, which will facilitate the momentum that we need.
	China's change of tack on Iran shows the importance of exerting influence on China. Russia's change of policy and the involvement of the Gulf states influenced China in that regard. We should try to emulate those actions in other ways to exploit the fact that China is open to influence. That, in turn-I repeat the point I made earlier-reflects the fact that levering change could be dependent on how we work with others. Indeed, there will be no change unless we work with others.
	On climate change, we should acknowledge Europe's success in building up global momentum and agreement on a legally binding treaty. It was not the case that Europe was not engaging, but what happened in Copenhagen resulted from the fact that we had nothing to engage with because we had the maximum on the table, and China reacted to that. What we saw before Copenhagen was that China was prepared to reject the deal with the BASIC group. That action was the result of influence on China. Copenhagen was certainly not a diplomatic success for China. I know for a fact that China is now busy working to rebuild bridges, particularly with African countries and small island states in the developing world, which feel badly let down by it. China is now busily trying to repair those relationships. We should not expect much progress beyond the Copenhagen accord before the Cancun meeting. However, the ball is most definitely in the European Union's court and that is an opportunity which we must grasp.
	European solidarity on human rights is essential when we put forward our arguments. We must continue to focus on Tibet and the Dalai Lama but we should give much more attention to the plight of political dissidents in China. The imprisonment and difficulties that dissidents experience get very little of our attention compared with Tibet and the Dalai Lama. It should not be a case of one or the other, but we should place more emphasis than we do at present on the plight of political dissidents in China. The European External Action Service must work to ensure that there is a strategy on how to maintain consistent pressure on human rights. We have many strong European Union Council positions-we have the common positions on China and other countries-but they are not being followed through sufficiently with strong and concerted European Union action. As with all the policies covered in the report, there should be incentives of a positive kind on the table when we have our discussions with China, but, in tandem with that, there should be clarity on what action the European Union will take when there are clear breaches of international human rights law and, very often, of Chinese law as well.
	Noble Lords have touched on Africa and China. I know from my experience of working in Africa how the activities of the Chinese there preoccupy many people who are involved in development and human rights. Beijing combines state investment in Africa with economic incentives to attract private investment. China displays hard-nosed self-interest but successes have resulted from its resource-backed development loans. For instance, reconstruction in Angola has been helped by three oil-backed loans, which have been used to build roads, railways, hospitals, schools and water systems. Angola required Chinese companies to subcontract 30 per cent of the work to local firms. People are not generally aware of that. The Congo will receive $3 billion worth of copper-backed loans from China. According to reports that I have read, the Congolese Government have stipulated that 10 to 12 per cent of all infrastructure work undertaken under the arrangement must be subcontracted to Congolese firms, that no more than 20 per cent of construction workers involved can be Chinese, and that at least 0.5 per cent of the costs of each infrastructure project must be spent on worker training. That represents considerable progress on what I observed in the 15 years during which I travelled frequently to Africa. There are still many concerns but we have to accept as a fact that Chinese teams are building a hydro power project in Congo in exchange for oil and another in Ghana to be repaid in cocoa beans.
	Chinese aid to Sudan is relatively small, but the joint venture on oil regrettably allows al-Bashir to maintain his power and Chinese arms continue to flow into Sudan in spite of the UN arms embargo. However, other aspects of the relationship are not so well known. China was pivotal in getting Khartoum to accept a joint UN-AU peacekeeping force. It agreed to the al-Bashir case being referred to the ICC. As a member of the Security Council, China could have vetoed that but did not. Beijing is working with the United States and the European Union to build joint strategies in Sudan. Again, that is progress on which we should build in future relations.
	As the report says, we must continue to ask for more transparency on official aid and other flows of finance. As noble Lords have said, there are concerns about China's relations with resource-rich countries in Africa, but claiming the high ground will not result in the progress being made that we need to see in China's dealings with these Governments, who, as we know, need huge investment in infrastructure. China provides the assistance that they need. It increasingly understands the importance of good governance in Africa, and that it is not in its interests to fail to support and encourage that.
	We are discussing the findings of this excellent EU committee report. We know that we have seriously to analyse what we have to do better in our dealings with China, a strong and powerful state protected by its status as a developing country, as others have said. Europe needs to have a comprehensive, strategic, persistent, concerted and well co-ordinated approach. The conclusion we reached is that the European Union must develop and refocus its foreign policy to meet the promise of the Lisbon treaty and the European External Action Service. Europe has moved on from past approaches and from the assessment of the Centre for European Reform that Europe's policies were,
	"a ragbag of opportunistic, allergic, poorly co-ordinated and panicky policy action".
	Europe will have to do better. I believe that that is possible and I hope that this excellent report will make a contribution.

Lord Wallace of Saltaire: My Lords, it is a pleasure to follow the very thoughtful and constructive speech of the noble Baroness, Lady Kinnock. The Foreign Secretary has made it clear that China is an area where there should be continuity of foreign policy. It is very much an area in which there is consensus among all the main parties on what British and European policy should be.
	The Government welcome this extremely helpful report which contributes to the British and European debate. Like other reports from the Lords' EU committee, it will no doubt be read in Brussels and other capitals. I apologise for the delay in the ministerial reply. There have been one or two hiccups in the middle, such as the general election. Some of the committee members, at least, will be aware that the Minister responsible wrote to the chairman on 3 June:
	"I hope that a time-frame of two months from the State Opening of Parliament on 25 May would be acceptable".
	So a full and detailed ministerial reply will be on its way well within that timeframe. I should perhaps also apologise and say that I hope my voice does not give out before the end of my speech. I have a rather bad cold.
	The report and the speeches in this debate have been balanced between EU/China issues and UK/China issues. I loved the comment in paragraph 35 that,
	"it was not always clear for China where the locus of governance was in dealing with Europe",
	referring to Chinese confusion over where the balance of authority lies between national capitals and Brussels on trade, intellectual property, technological co-operation and everything else. Of course, Members of this House are entirely clear where the balance lies between Brussels and Britain. This is part of the constructive ambiguity with which we all deal within the European Union, and the Chinese are learning to navigate their way around it.
	On the other hand, there is a useful emphasis in the report that China, in its turn, is not a monolith. We need to pay more attention to the Chinese provinces, and we need to make sure that there is representation for the United Kingdom and, indeed, for the European Union as a whole in the major Chinese provinces. When being briefed, I was told that Guangdong province now has an economy larger than that of Saudi Arabia, for example, with 30 other provinces to add. So far as China is concerned, the future of the EU External Action Service is very much a matter of coming to grips with a complex entity.
	China is a priority for the noble Baroness, Lady Ashton. We fully support her objectives and her efforts there. She visited China at the end of April, and one notes that this is a dual relationship. President Sarkozy made a major visit. The Chancellor was in Beijing on 3 and 4 June for economic discussions and then, I remind the noble Lord, Lord Clement-Jones, went to the Shanghai Expo to visit our excellent exhibition there.
	The noble Lord, Lord Anderson, asked about collocation and secondment. I remind him that the British Government have collocated a number of their missions with others-in particular, German ones-and I think in at least one case with a European Commission office. Therefore, there is no objection in general and, indeed, there is a huge advantage in doing so, often on economic grounds. The European Union External Action Service is in the process of development. We are busily training and seconding officials to it, but we will have to write to the noble Lord about the development of the structure of the EU External Action Service in China.
	It may be appropriate to say a little about the new coalition Government's approach to co-operation on foreign policy within the EU. The noble and learned Lord, Lord Howe, referred to William Hague's maiden speech at the Conservative Party conference. The noble and learned Lord reminded me the other day that on the famous photograph so often reproduced of the 15 year-old William Hague, there are only three other recognisable faces, one of which is his. So a number of people go back that far with William Hague.
	In the Queen's Speech debate in the Commons, the Foreign Secretary said:
	"The Government will be an active and activist player in the European Union ... while working to make the European Union as a whole a success ... It is also in our interests and in the EU's general interest for the nations of the EU to make greater use of their collective weight in the world".-[Official Report, Commons, 26/5/10; cols. 187-88.]
	This report is, after all, about making greater use of the EU's collective weight in its relations with China. In a couple of days' time, the Deputy Prime Minister and the Foreign Secretary will be speaking together in Berlin about Britain's European policy.
	The noble Lord, Lord Cobbold, asked whether an enhanced partnership with India, mentioned in the coalition agreement, would mean that China would be downgraded. We do not see it as one situation versus the other; we very much want to continue to build on the previous Government's approach to China and to extend their strategic dialogue as far as we can. We already have a fairly developed structure of annual summits, the economic and financial dialogue and, now, the strategic dialogue. Therefore, we are currently talking to the Chinese at many different levels.
	There has been much reference in this debate to history. The noble Lord, Lord Alton, went the furthest back-150 years-reminding us that the western treatment of China, with years of humiliation, western arrogance and complacency, is still very much in their minds. That explains part of the intense sensitivity with regard to sovereignty, outside criticism of domestic affairs, including on human rights, their treatment of minorities and the management of Tibet and Xinjiang, and so on. Perhaps we also have to be a little more humble in remembering that when we were behaving in Beijing in the way that the noble Lord suggested, our treatment of our national minorities in Ireland was not entirely above criticism. Therefore, we are moving along a certain path.
	The noble Lord, Lord Hannay, talked about the opening of contact with the EC in 1975. We are, after all, still struggling with a trade agreement of 1985 and are making efforts to move that forward into a more constructive partnership agreement. However, I think we all recognise that the transformation of China since then-economically above all but also to some extent socially and in some ways even in terms of human rights and the rule of law-has been remarkable. The noble Lord, Lord Alton, talked about the changes in the freedom to worship. The noble Lord, Lord Selkirk, quoted the claim-which perhaps is quite correct-that the Chinese have better human rights now than they have had over the past 5,000 years. There may be some way further to go but there are signs of movement in the right direction.
	The noble Lords, Lord Clement-Jones and Lord Crickhowell, both said that it is a great mistake to preach at the Chinese. It is far better to appeal, as far as we can, to their enlightened self-interest. That is clearly true in relation to the rule of law. On my first visit to Beijing in 1981, I met Professor Gerry Cohen from Harvard, who was giving introductory lectures on international law to Chinese trade officials. They did not want to learn about that out of a sense that it was important intrinsically; they wanted to negotiate over trade-enlightened self-interest. Similarly, the Great Britain-China Centre, to which the noble and learned Lord, Lord Howe, referred, has made very important contributions to work on rule-of-law issues in China. We have to persuade the Chinese that a stronger rule of law, a stronger recognition of the importance of whistleblowers in providing for better industrial relations and better sustainable development is in their own interests and not just a question of value. That has to be the way forward. The same is true of their attitude to intellectual property, which is still a sensitive issue, to the market economy and to energy use.
	We will, if we may, write to the noble Lord, Lord Alton, on the specific human rights issues that he mentioned. We raise specific cases of concern within our human rights dialogue with China. The last round of the EU human rights dialogue with China took place last November and the next round is due to take place in Madrid in June. In that dialogue, we will again focus on freedom of expression, freedom of the press, human rights defenders, the situation in Tibet and Xinjiang, and the death penalty, torture and so on. Therefore, we continue to raise these issues and slow progress is made.
	Similarly, on climate change, we have some leverage because the Chinese themselves are increasingly worried about the environmental damage they are doing to their economy. Therefore, we welcomed the focus on climate change during the recent visit to Beijing by the noble Baroness, Lady Ashton. We are also engaged with the Chinese in work on carbon capture technology and on other forms of reducing the energy intensity of their economy.
	We have to explain to them that, because of its special status, it is in their interests that Hong Kong continues to remain an economic and financial driver for the entire Chinese economy. In the introduction to the 2009 EU annual report on Hong Kong, just published, the noble Baroness, Lady Ashton, welcomed the EU's strong support for early and substantial progress towards the goal of universal suffrage in accordance with their Basic Law. So we are doing our best to persuade them that their enlightened self-interest goes along with the values that we ourselves wish to promote. This is more difficult in some areas than others.
	Several noble Lords mentioned the arms embargo issue. It is a sensitive issue partly because it is one for both sides. Indeed, in some ways it is more symbolic than real. It was imposed because of the abuses of human rights, above all in the Tiananmen massacre. It was not originally linked to the Taiwan issue, although we are conscious of the Taiwan dimension and there is broad consensus in Europe that now is not the right time to lift the arms embargo. We need to see clear progress on those matters before the issue is raised again.
	Cyber crime strategy and the whole question of what is happening is one of the most sensitive issues with which we are dealing with the Chinese and with companies such as Google operating in China. We agree that we should continue to work closely in this area with all our partners in the EU, NATO and other relevant organisations. A number of noble Lords raised the much broader question, which is in the report, of how to encourage China to become what some call a more responsible power or to shoulder a larger share in the responsibility for maintaining global order and prosperity. Again, the report notes that China is gradually becoming more engaged in all sorts of ways. It is the largest contributor to peacekeeping within the P5, although most Chinese peacekeepers I understand are still in the logistical, medical and support dimension. They do not yet have combat troops in UN peacekeeping operations, unlike India which is the largest contributor to UN peacekeeping operations at present. When I looked at how many British ships were taking part in the anti-piracy operations off Somalia, I was struck by the fact that there was one British ship and three Chinese. So the Chinese are beginning to take a larger role.
	In Africa, too, as the noble Baroness, Lady Kinnock, said, the Chinese now find themselves moving up a learning curve on how they need to co-operate with African states to preserve their longer-term interests. Sudan is an interesting case in point, where the possibility that there might be a secession in Sudan in the next year-possibly accompanied by further conflict-must directly affect Chinese interests. We therefore have an interested basis on which to discuss with the Chinese how we help to prevent future conflict. We see ourselves as working with the Chinese on peacekeeping and peacebuilding and there is more to be done to encourage the Chinese to take full part in multilateral approaches to conflict prevention, post-conflict reconstruction, and so on. We will be ending the British bilateral aid programme to China next March and we see ourselves moving towards a strategic partnership with China in international development, which will be working with China on issues such as African development. The International Development Secretary has asked that a global partnership fund be established within DfID to provide resources to work with countries such as China on the exchange of experience and mutual learning in support of other developing countries. I hope that noble Lords think that that is a useful step forward.
	We have to recognise that as we adjust to China taking a larger role in international institutions, that may in time raise some painful issues for Britain and other European countries. We are all-the Italians, French and Dutch, as well as the British and the French-conscious that we wish to retain our positions in the IMF and elsewhere. There is much to be done in terms of how we adjust.
	On North Korea and Taiwan we are conscious that China is the only country that can significantly influence North Korea. China pursues a policy of economic engagement to encourage stability in North Korea and avoid the threat of a collapse, which would hit China more strongly than anywhere else except for South Korea. We have to ensure that Chinese policies do not undermine UN Security Council resolutions designed to prevent proliferation. On Taiwan, again we do all that we can to encourage China to recognise that a peaceful relationship and further development of the relationship of two countries within one state should be developed. So far, again it is clear that that is also in China's interest as well as in ours.
	Several noble Lords mentioned the question of the considerable attention to China from within the United Kingdom and the extension of British and other European students studying in China. More young people are being encouraged to study Mandarin elsewhere. Again, these are encouraging signs. The last time I was in Beijing I was lecturing on a joint London School of Economic graduate degree course in China made up of half British and European students and half Chinese. The University of Nottingham is doing much more than that, so there are a number of initiatives under way, not all of which are government-led, helping to encourage that. I know that a number of independent schools, in particular, are encouraging more people to study Mandarin.
	In conclusion, the Government are happy to accept many aspects of this report's analysis. We see that a more coherent and effective EU-China relationship should be a priority for the EU High Representative for Foreign Affairs and for the European External Action Service, supported by a more consistent approach to China from the different member states. Constructive engagement with China can deliver huge opportunities for the people of Europe across our international, bilateral and trade priorities. I thank the EU Committee for this excellent report and look forward to the next one on this subject.

Lord Teverson: My Lords, I thank the Minister for his response and also for his undertaking to come back to us with a full Government response. We have had a response already from the previous Government and I want to thank the now Opposition for their positive response to our report when they were in government.
	I particularly thank non-Sub-Committee C members for contributing to the debate. Their contributions were as excellent as those from members. Two noble Lords talked about the importance of the parallel role of EU and member states. That is absolutely right but most importantly, both understand what each other's roles are. They are consistent on that and it is not all about the way in which it is written in a legal treaty-Lisbon or whatever. It is around making that work in practice.
	I take the point made by the noble Lord, Lord Faulkner of Worcester, about the death penalty in China. That should have been covered far more strongly. We did not cover Taiwan because this report was broad enough as it was, but the plain fact is that Europe has no effect on the strategic relationship and the risk of that conflict between Taiwan and China. That is an entirely Chinese-United States issue and, regret it or not, the EU has no leverage in any defence way over it.
	I shall respond briefly to the noble Baroness, Lady Kinnock. I take her point about the European Parliament. I am not absolutely sure that we did not ask for help when we went to Brussels and asked for an interview. I may be incorrect. She is absolutely right about all these reports.
	I was interested in the idea, which I take particularly from our history, that we might have a paternalistic attitude towards China. What concerned us most as a committee was the opposite of that-as if Europe in many ways has already said, "Game over. China is the future; Europe and the West is the past". It was that fatalism about the future that concerned us. We wanted to see Europe as a major player in the future. Various development issues are important and in many ways we were positive about China's future role there.
	Finally, I join many fellow committee members in thanking our committee clerk, Kathryn Colvin, and Oliver Fox and Bina Sudra who gave us a huge amount of positive clerical and organisational assistance. In particular, I thank our special adviser, David Kerr, who gave us superb assistance during this assignment. I commend the Motion.
	Motion agreed.

Genomic Medicine: S&T Committee Report

Genomic Medicine

Motion to Take Note

Moved By Lord Patel
	To move that this House takes note of the Science and Technology Committee Report on Genomic Medicine.

Lord Patel: My Lords, the sequencing of the human genome in 2000, and the technological advances that made that possible, brought with them the possibility that these advances could benefit healthcare. The Government of the day recognised this by the publication of the White Paper, Our Inheritance, Our Future, in 2003. The investment that followed resulted in the provision of services mainly for the treatment of single gene disorders.
	Several further advances have resulted in the development of molecular and genetic tests, both for identifying risk of disease and treatment. As genome sequencing technologies improve and more genetic tests become available, new models of service delivery will have to be considered. We are familiar with the association of diseases such as cystic fibrosis, Huntingdon's disease, sickle cell and others with defects in single genes. The sequencing of the human genome in 2000 affords scientists the opportunity to explore the association of gene mutations in more common diseases such as diabetes, heart disease, cancers, Parkinson's disease, mental health and many others. The development of genetic tests has made it possible to target treatment to patients most likely to benefit, identifying patients sensitive to certain drugs such as Warfarin-an anticoagulant-and retroviral drugs for the treatment of HIV and many others.
	In the world of competing priorities and cost savings, how are the advances in genetics and clinical genetics going to be translated into clinical practice? We should be certain of one thing: that scientific advances will lead to the identification of newer drugs, allowing for the treatment of more diseases and the identification of patients most likely to benefit from treatment. Without the planned introduction of validated tests, the effective treatments available across the whole of the NHS will not occur. A postcode lottery in the provision of care will develop, as it already has in relation to the use of currently available genetic tests for single gene diseases.
	The purpose of our inquiry was to explore the current state of genomic science and its implications on healthcare. We also briefly explored the ethical and legal implications of genetic information. The report is presented in seven chapters, each focusing on different issues. It is based on the written evidence given in response to our call for evidence, and oral evidence from some 140 individuals representing nearly 110 organisations. We make 54 recommendations. All the evidence is presented in part 2 of the report, running to nearly 360 pages. We also carried out a visit to the National Institutes of Health in Bethesda, Maryland, to get evidence from the USA. It was presented to us in 34 sessions over three days.
	The previous Government responded to our report, accepting some of the recommendations. However, in general the response was poor and failed to recognise the reasons for some of our recommendations. The coalition Government now have an opportunity to scrutinise the report and, I hope, produce a more studied response over the coming months. I hope, though, that by the end of today's debate the Minister will commit the Government to taking forward some of the key recommendations, particularly those related to the White Paper on genetics and the new Institute of Bioinformatics.
	Let me briefly allude to some of the advances in genomic science with implications on healthcare, and refer to some of the dramatic advances reported since the publication of the report in July 2009. Watson and Crick described the structure of DNA in 1953, working in Cambridge. Fred Sanger, also from Cambridge, reported on the methodology of sequencing the human genome in 1977. The mapping of the complete human genome was reported in 2000 and cost around $3 billion. The mapping of the second human genome cost around $180 million. The third mapping-that of James Watson-cost around $1.3 million. The pace of the sequencing technology is such that both the speed of doing the sequencing and the cost is coming down by the month. The most recent report suggests the cost to be in the region of $10,000, with the prediction that within one to two years it will be down to $1,000 or even lower.
	Moore's law that applied to developments in microprocessing may well apply to the sequencing of the genome-some say to the point that regular and repeated sequencing of an individual patient's genome will be routine practice in clinical medicine. High-throughput sequencing technologies opens up myriad opportunities: the identification of rare variants of DNA that have a large effect in an individual's risk of developing disease; gene mutation in cancers; de novo mutations in a range of diseases; monitoring the progress of disease; and effective treatment. Costs may even be less if targeted sequencing is used. Protein encoding axons of the 23,000 or so human genes comprise 1 per cent of the genome but contain 90 per cent of the mutations that cause disease. Of course, more scientific work is still necessary to increase the accuracy and relevance of the vast amount of information.
	The United Kingdom will need adequate capacity for fast sequencing. Currently, only a few companies worldwide provide this. One of them, Oxford Nanopore, is based in the United Kingdom, but China is building this capacity fast. Recent reports in the Lancet, New England Journal of Medicine and New York Times reported the identification of rare mutations of single-gene diseases such as Clarcot-Marie-Tooth disease, Miller syndrome and ciliary dyskinesia. These suggest that the identification of rare mutations of common multigene diseases, such as diabetes, heart disease, cancer, Alzheimer's and others, using whole genome sequences, will be possible-and soon.
	The scope of our report did not allow exploration of the role of environment in DNA modifications and disease without genome alteration in the science of epigenetics. Clearly, though, the ability to map the epigenome is crucial, as key elements in the development of disease are controlled by the epigenome-the chemical modifications not encoded in DNA that control how and when genes are expressed.
	Pacific Biosciences, a company based in Menlo Park, California, which I visited last year, reported two weeks ago on an integrated system it has developed that simultaneously reads a genome sequence and detects an important epigenetic marker called DNA methylation, which reduces gene expression and is linked to disease development in many types of cancers. With the further refinement of technology, we might be heading towards a full-scale methylation map at a cost of hundreds of thousands of dollars. It will change our understanding of the behaviour and functionality of cells with identical genomes, and their association with disease development. While companies like Oxford Nanopore in the UK are developing such technologies, bigger investment is needed if the UK is to maintain its lead.
	A recent report in the Lancetillustrates further benefits of rapid sequencing. Investigators were looking for novel mutations-rare variants in DNA-that could modulate a response to drugs. A 40 year-old healthy male with a family history of premature coronary heart disease, aortic aneurism and sudden death had his genomal sequence analysed. The report identified 63 known pharmacogenetic variants that could affect the person's response to commonly used drugs, such as statins, Warfarin and Clopidogrel.
	That brings me to pharmacogenetics-the way in which genetic variations across the genome affect drug metabolism. The right drug at the right dose for the right patient is the way to go for medication in future. Current estimates suggest that 400,000 patients a year in the NHS suffer severe drug reaction, with 15,000 to 20,000 resulting in fatal outcomes. We also make recommendations about the stratified use of medicines, an area of potential UK leadership if the right investment is made now. An increasing range of cancer drugs, such as Herceptin, Iressa and Erbitux, are effective in patients only if they have specific mutations in P13 kinase and other pathways. Breast cancer patients with HER2 receptors respond to the drug Herceptin. Similarly, patients with non-small cell lung cancer with EGF receptors respond to the drug Iressa. Further developments in molecular and genetic tests will lead to more patients being treated in a similar way.
	The UK can lead in the development of the stratified uses of medicine. Cancer UK alone has been involved in the development of 30 cancer drugs that are used across the world. There is a need for a national strategy. The research community, the research councils, the National Institute for Health Research, industry and private funders can all drive that. Cancer Research UK has established networks that, within five years, will use genetic tests to guide cancer treatments for all patients in the United Kingdom. The potential for United Kingdom plc in this area is huge. The Department of Health and the Department for Business, Innovation and Skills need to support the development of an innovative platform for the stratified use of medicines, bringing Cancer Research UK, the Technology Strategy Board, the research councils, the NIHR and the ABPI together.
	Many other recent advances are reported, such as area-based tests for prediction of prognosis and a guide to best treatment for acute and chronic leukaemias, sequences of bacterial genomes for treatment of TB in drug-resistant cases, tracking the spread of MRSA from person to person in the population, and many others.
	Assessing clinical utility and validity before the use of tests in the NHS will be crucial. Our recommendation that NICE should do that should be accepted. The United Kingdom has fallen behind, when previously it led in clinical trials. Two days ago, I met representatives from Novartis, having previously met representatives from other big pharmas. The interpretation of the regulatory framework in the United Kingdom, which is different from the interpretation of the same regulation in the rest of Europe, and the bureaucracy that each individual trust has put in place for clinical trials make doing clinical trials in the United Kingdom difficult. We have now dropped from number two in the world to number 17, with most of the trials now going to China. I hope that the review by Sir Michael Rawlins will address that, but the Government also need to be aware of that and do more.
	I turn to another of our key recommendations. I hope that I have convinced the noble Earl that all of the developments that I have described so far have implications for healthcare, research and for UK plc and that good information collection is crucial. Our report strongly recommended that a new institute of biomedical informatics should be established, together with training to develop expertise in bioinformatics. Sir Mark Walport of the Wellcome Trust said in his oral evidence:
	"I have visited the set-up in Dundee and it is very powerful in terms of informatics, providing better patient care and is doing very sound research".
	I extend an invitation to the noble Earl for a private visit to see it for himself. Dundee is not that bad a place.
	My recent visits to academic centres, hospitals and companies in the United States-the universities in San Francisco, Stanford, Berkeley and Harvard, as well as Houston medical city and Massachusetts General Hospital-have demonstrated how sequencing technologies for genomes and epigenomes are being used in clinical practice and how genetic and molecular tests are routine in the care of the patient. We may be well behind in that. If we do not invest as a country in infrastructure and support industry, we will pay higher costs, as we already do for the use of certain tests, such as BRCA1 and BRCA2 for the identification of the risk of breast cancer in individuals. The United Kingdom has the capacity to lead, both in life sciences and in synthetic biology. Life science developments with engineering science can lead to the development of technologies and molecular markers.
	With these advances will come ways of delivering healthcare and identifying disease risk, which will drive public health policies. They will change the ways in which disease is diagnosed, disease progression is monitored and treatment is chosen. They will deliver early measuring of the effectiveness of the treatment through use of molecular tests as the epigenome changes. Medical care will be personalised, which will have implications for the way in which commissioning takes place. PCTs are struggling now with commissioning and I wonder how they and GP commissioning will work for personalised medicine. Will we not run the risk of even more postcode lottery in the care of patients? Apart from the instances that I referred to in diagnosis and treatment of single gene disorders and their screening, where there is great variation in care in the United Kingdom, there are many other examples, such as the variation in genetic tests for breast cancer. There is also great variation in the identification, screening and treatment of patients and relatives with mutation leading to long QT syndrome, which causes sudden death, usually in young people, and is now a preventable disease, and there is variation in the screening of patients for the stratified use of medicine in cardiac disease and some cancers. These are only some examples, but we also have a high incidence of late diagnosis of cancer, leading to poor outcomes.
	There are several other issues that, no doubt, the other noble Lords on the committee and others will cover. However, let me ask the noble Earl some questions. Will the coalition Government stand by some of the commitments made by the previous Government? Will the current Government go further and commit to produce a White Paper on genetics and clinical genetics? Let us give them some time; let us say 18 months. Will the Government commit to establishing an institute of biomedical informatics? Will they support the development of innovative platforms for the stratified use of medicine?
	While not all the current promise of genomic and epigenomic science may come to fruition, there is already irrefutable evidence that developments in science will have implications in healthcare. There is also good evidence that the UK has the opportunity to benefit from investing in both technology development and science. Too often in the past, as happened with monoclonal antibodies-now a £2 billion per year business-CAT scanning, MRI, ultrasound and many drugs, we do the good science but are poor at converting it to commercialisation. We need to change that if our economy is to benefit. The subject is so important that I hope that the Science and Technology Committee will return to it in two or three years.
	I shall conclude with some well deserved and most sincerely acknowledged thank yous. It was a privilege to be asked to chair the inquiry by the Science and Technology Committee. An added bonus was to have such talented members in the committee, who were all fun to work with and very supportive. The committee was supported by our clerk, Elisa Rubio, until near the end, when she had to leave on maternity leave. We also had full support from our science adviser, Rachel Newton, and the clerk to the Science and Technology Committee, Miss Christine Salmon Percival, who also performed the brilliant task of converting scientific gobbledegook into the understandable, readable report that we see. Last but not least, I thank our specialist adviser, Professor Tim Aitman, who handled us all with respect and kept us informed and educated. Only rarely did he show his frustration at our lack of understanding. He worked truly hard, despite his clinical and academic workload. To all of them I say a huge thank you, because without their effort the report would not have been possible and they certainly made my task easier.
	I also wish to put on record my thanks and that of the committee to Dr Francis Collins, a great proponent of personalised medicine, who led the sequencing of the human genome that was reported in 2000. He is now the director of the National Institutes of Health in Bethesda, Maryland. He organised our visit to the United States and co-ordinated the presentations by experts from all over the US. He and his colleagues put huge efforts into making sure that our visit was informative, which it was. I thank him and his team. Finally, we had to have the debate today, for today is Professor Tim Aitman's birthday. I am sure that the whole House will want me to wish him happy birthday from us all.

The Earl of Selborne: My Lords, the whole House will wish to congratulate the noble Lord, Lord Patel, on this important report and on the informative way in which he introduced this debate. I was not a member of the sub-committee, so I can say with some degree of impartiality that I believe that this report can be listed, with several others over the years from the Science and Technology Committee, as one that fulfils the key role of informing and stimulating public debate on issues that inevitably arise when there are rapid and far-reaching scientific advances leading to challenges and, of course, opportunities for the user community, government, regulators and the scientists themselves.
	The noble Lord, Lord Patel, spelled out graphically the dramatic speed of progress in sequencing and the increase in the volume and complexity of DNA sequence data that are now being produced. These have given rise to a new, highly skilled industry that is growing rapidly around the world. We are leaders in it, which is an important attribute that we should never lose sight of. The health benefits to be gained over the years ahead could be great. It is important not to oversell them, but anyone would recognise at first glance the potential for disease diagnosis and management, although much of it is as yet unfulfilled. However, this will happen only if the development of informatics keeps pace with the accumulation of data. Already we are beginning to see that our ability to interpret the results is lagging behind the new generation of sequencing technologies, so it is essential that bioinformatics support and functional genetic investigations are available in close conjunction with the clinical services.
	I shall confine my remarks to Chapter 5 of the report, which relates to the need to support bioinformatics. Interpreting this ever increasing accumulation of data presents a major challenge for researchers and clinicians. The noble Lord, Lord Patel, quoted Sir Mark Walport's oral evidence. I shall quote a different part of his evidence, which is reproduced in paragraph 5.7. He said:
	"I think one of the major things that this Committee could actually be helpful on is to point out the need for there to be proper and sustained funding for databases such as the European Bioinformatics Institute which will otherwise become unsustainable and would put Europe in a weak competitive position".
	It was gratifying that the previous Government in their response accepted the case for more secure funding for the EBI through the Research Councils UK's large facilities road map and that the Biotechnology and Biological Sciences Research Council-the BBSRC-awarded the EBI £10 million to increase its data capacity. The BBSRC is now developing the business case for longer-term funding for the institute. This gives ground for optimism that appropriate investment in informatics infrastructure at the European level might be secured with leadership from the United Kingdom. The BBSRC deserves credit for having led on this.
	The noble Lord, Lord Patel, also referred to an innovative company, Oxford Nanopore Technologies, which gave evidence to the committee and has circulated a note drawing attention to developments since the report came out, specifically drawing attention to the demand for trained bioinformaticians. It seeks to recruit in that specialised sphere, but it says that there is a limited pool of skilled resource in the United Kingdom at a time when the demand for trained bioinformaticians is exploding. It states:
	"Access to bioinformatic resource, particularly for smaller laboratories, will be a key enabler in achieving critical mass in genome research and translating the results of that research into clinical practice".
	No one could possibly quarrel with that observation.
	The noble Lord, Lord Patel, referred several times to recommendation 8.23, which states:
	"We recommend the establishment of a new Institute of Biomedical Informatics to address the challenges of handling the linking of medical and genetic information in order to maximize the value of these two unique sources of information".
	This recommendation appeared to have been kicked into the long grass in the previous Government's response. They undertook to consider the proposal carefully-I am always rather chary when I hear the response "We will consider it carefully", because I think that I know what it means-but no dedicated funding was made available. Instead, the response referred to the excellent work at the National Genetics Reference Laboratory in Manchester in delivering bioinformatics courses for molecular and clinical geneticists. However, we have to put this in perspective. The Wellcome Trust Sanger Institute, which also speaks with some authority, commented that while this laboratory in Manchester,
	"is carrying out some work in this area, it has neither the funding, the mandate nor the focused mission to lead the United Kingdom in a coherent fashion in the use of linked medical and genetic information. A national institute of biomedical informatics with this specific mission would ensure that the UK translates its research leadership in these areas into improved healthcare delivery. Without it we are likely to fail at the point of translation into material benefits, as has happened so often before".
	The noble Lord, Lord Patel, and his committee are right to put so much emphasis on ensuring that we have an appropriate national capacity to meet the biomedical informatics challenge. I hope that the Minister can assure the House that this recommendation will be followed up.
	Whenever any new facility is proposed in these days of funding cuts, I accept that there is a responsibility on those who support the proposition to explain how it is to be funded. In the United Kingdom, we spend about £2.5 billion on pathology services, which are scattered around every hospital in every corner of the National Health Service. These pathology and laboratory services in NHS hospitals tend to be fragmented. In his evidence, Sir John Bell said:
	"There is an urgent need therefore to rationalise the management of these, either at an NHS Trust level or through large regional laboratories".
	The virtues of that are economies of scale, bringing together state-of-the-art equipment and the integration of laboratory services, which would save money and provide a coherent, integrated delivery. The medical profession, which always tends, like any other profession, to protect its own patch, must recognise that the sovereignty of individual specialities cannot inevitably be protected. By bringing together molecular pathology and genetics laboratories, one has opportunities for the more efficient use of existing resources. I commend that to the Minister. I very much hope that the Government will now make a national institute of biomedical research a reality.

Baroness Royall of Blaisdon: My Lords, I speak today not as a real participant in this debate but to ask the House's permission for our Front-Bench contribution to be given at the end of the debate by my noble friend Lord Winston. Having listened to the first two contributions, I am already in awe at the knowledge, wisdom and expertise that I know will be demonstrated throughout today's debate, which is a hugely important and very exciting debate. I could not make a worthy contribution because my own knowledge of genomic medicine could probably be written on something considerably smaller than a DNA sequence.
	In moving into opposition, we are still some way from finalising our Front-Bench spokespeople in this House. In the interim, I ask the indulgence of the House and of my colleagues and ask a number of them to step up to the plate. Indeed, I trust that they will continue to be Front-Bench guest spokespeople from time to time. Today I happened to strike lucky when I asked my noble friend Lord Winston to speak on behalf of the Opposition today. I regret that I cannot stay longer and learn more, but I will read today's Hansard tomorrow with huge interest. I know that I will learn an enormous amount.

Lord Taverne: My Lords, the committee's inquiry into genomic medicine was a very wide-ranging inquiry into a very important and highly technical subject. It is a subject in which I am a layman and, even after hearing a large and impressive array of expert witnesses, I cannot claim any but the most superficial knowledge of the issues involved. Fortunately, we had a very learned and able chairman, who handled our inquiry with great skill, expertise and charm. We had an excellent expert adviser and splendid supporting staff, and many of the committee members had valuable experience and knowledge of their own. All I can do in my speech is to contribute some rather general observations.
	A basic question that we face is: how likely is genomic medicine to produce substantial benefits in the short to medium term, say in the next five years, in the treatment of disease? Experts differ on this. If benefits are many years away, the case for the urgent implementation of our recommendations is obviously weakened. An independent response from the Foundation for Genomics and Population Health and Cambridge University's Centre for Science and Policy, for example-two pretty heavy-weight bodies-was rather dismissive of the short and medium-term prospects for benefits to the nation's health. It is agreed that staggering progress is being made in the sequencing of human genomes. There is also no doubt that there has already been a major impact on single gene disorders, such as Huntington's disease, and single gene subsets of some common diseases, but these are rare diseases and affect only a tiny proportion of the population. However, it is argued, when it comes to genetic tests for common diseases, that the gain to clinical utility in the short or medium term will be small, and a great deal more research as well as trials will be needed before we can be confident of the benefits that genomic medicine can bring to a wider section of the population.
	The critics of our report are similarly cautious about the prospects for substantial early developments of pharmaceutical drugs that are tailored to individual needs or about how much knowledge can soon be gained of adverse side effects of particular drugs in individual cases. At first, I was somewhat sceptical about the claims of early prospective benefits-big benefits for tiny cohorts, tiny benefits for the big cohorts-but I believe that the balance of the evidence that the committee heard clearly leads to a more optimistic conclusion.
	There is an impressive list of examples in paragraphs 2.16 to 2.30 on pages 17 to 20 of our report, and further developments have since added to them. Genetic variants, for example, with only a very small effect on risks, may enable us to identify new pathways for diseases, opening up the prospect of substantial benefits in treatment. Single nucleotide polymorphisms, which are associated with breast cancer, could identify women with a much bigger risk of breast cancer. Microarray measurements of gene expression in tumour tissue could separate women who have breast cancer into low-risk and high-risk groups, which would allow some to avoid chemotherapy and lead others to be treated more aggressively than they might have been. The Breast Cancer Campaign recently sent us a letter, which I am sure other members of the committee have had, showing that it is confident of real progress in identifying patients' risks and the treatment of breast cancer.
	A large number of people with a particular mutation who had diabetes in the first few months of life could be taken off insulin even after 30 years, and we heard that there are reasonable prospects of identifying new genes that will lead to the stratification of patient groups. A witness from the Pfizer group told us that the effect of pharmacogenomics and targeted medicines is being felt in every aspect of research and development in the pharma industry. Better drug treatment for individual patients will follow. Indeed, the Human Genetics Commission thought that new developments were most likely to come into clinical practice in the short term from pharmacogenomics. I believe that our committee's optimism was amply justified by the evidence. Moreover, progress in the field is changing so fast that for once a more optimistic view is more likely to be justified.
	What will happen now? The most important item in the Government's response is probably the establishment of a human genomics strategy group. This seems a reasonable reaction if it is properly funded and staffed, but what chance is there in the present financial climate of proper funding for this body and for our other recommendations that need government money, albeit fairly modest sums?
	I realise that everyone argues that their pet cause must be exempt from pending cuts. Cuts are for other people. I remember this well from my time in the long distant past as a Treasury Minister at a time of severe cuts in government spending way back in 1968 after the 1967 devaluation. However, I hope that the new Science Minister, David Willetts, will be able to demonstrate to his colleagues, as I believe is the truth, that our long-term prosperity depends more on our science base than on almost any other factor. The Government should think big and bold. Let us suppose that we were after all to phase out Trident in the Strategic Defence Review. Trident was designed to protect us from Soviet missiles in a different era, and its present justification is at the very least somewhat vague and lacks intellectual rigour. Let us also suppose that half the billions saved were diverted to increase the science budget. We could be firmly established as the leading nation for science in Europe. We could realise a vast potential for innovation in the industries of the future: a potential that is there to be realised if we effectively exploit the exceptional quality of our science, especially in the fields of biology, biotechnology and modern medicine.
	The committee was told, I believe correctly, that genomics was one of the highly important areas of future development and that we were among the leading nations in the field-certainly in the academic field. It would be a tragedy if the Treasury's axe were applied proportionately to science generally, and to developments such as genomics in particular, as to all other parts of government spending, and if the relatively small extra expenditure for which our report argues became part of the sacrifices that all government departments will have to accept. Frankly, I sometimes doubt whether most Cabinets-this Cabinet may be an exception-really understand the absolute importance of science. David Willetts was a good choice as Science Minister, and he is probably our best hope.

Lord Sutherland of Houndwood: My Lords, I, too, congratulate my noble friend Lord Patel and his colleagues on producing an excellent report. I also congratulate my noble friend on a judicious, clear and dazzling introduction, not least to those of us who are not specialists in the field. As chairman of the Science and Technology Select Committee I had the privilege of ex officio and visiting membership of the sub-committee. It gave me, along with the reports I received, ample evidence of a fine and important report in gestation, which has now come to birth and is before us.
	I thank those who submitted evidence to the committee-those 140 individuals and 110 groups who took the time and effort. I simply ask your Lordships to look at all 640 pages of volume 2. It is a heavy and weighty tome in every sense. This is the distillation of scientific expertise, information and knowledge of which many a government around this world would be deeply envious. Please pay detailed attention to it. It tells a very important story. I wholly endorse the points made by my noble friend about the importance of bioinformatics and institutional development in this area. It is essential that we seize the opportunities which our scientists and technologists have given us.
	This series of submissions leads me to be briefly political-with a small "p". My first political point to the Government is that this is evidence of a strong, informed and powerful national interest in these topics. It will continue to subject government policy and practice to scrutiny, along, I hope, with the help of future emanations from the Science and Technology Select Committee. This issue will continue to be scrutinised in some detail.
	The second political point-with a small "p"-is not quite as direct to the Minister, but a request to him to carry a message back. A measure of the impact of the report of the Science and Technology Select Committee is to be found, first, in this volume of evidence, and, secondly, in the subsequent reports from those who gave evidence in the first place in response to the Government's reply. This is a measure of the impact of the importance of this committee. It is an impact which goes far beyond this Chamber. Will the Minister draw this to the attention of those who are charged with making proposals for the reform of the House of Lords? An elected House, which would have no room for the calibre of scientific expertise and wider scientific engagement which this committee attracts, would be a much impoverished House. That point needs to be before those who are to think about the future shape of this House.
	However, perhaps I may slightly deviate from my noble friend Lord Patel, who expressed his disappointment eloquently on the government response. That was a relative disappointment: I simply have to add that if noble Lords had seen some of the government responses that I have seen over the years, this is pretty good. At least there are some proposals which suggest that the previous Government were interested in moving forward in this area, which are to be welcomed. The fact that there is a good, considered government response, although it does not agree on all points, is a civilised way of advancing debate on this important and complex topic. I shall come to this issue shortly.
	As other speakers have indicated, I should like to say a word first on the broader context which we inhabit. In scientific terms, the context is one of significant scientific advance in this country and elsewhere. There are fruits to be cropped here of huge significance; namely, medically, the health of the nation, commercially for the economic health of the nation and so on. These advances give us the capacity over time to extend the range of medical treatments and the good health of the nation. It should be noted that most of the advances proposed in this report are potentially part of that holy grail of preventive medicine-that after which we all seek and strive, but to which we seldom pay sufficient attention. Preventive medicine is to be preferred to the rather more expensive remedial alternative. Again, this report gives a direction of travel if we are to make the most of that. That is the scientific context.
	The economic context is well expressed in the perhaps ill-judged joke-"Sorry there's no money left". However, the truth of this is evident to all of us-we are in times of severe financial constraint. That constraint allows various responses. One response is special pleading on our part and I have no doubt that there will be a fair bit of that. There will be special pleading to say that this is important, and it is, but that is not the direction I wish to follow now. A second response is to cut and slash percentagewise across the board, which would be ill-considered in this area. Let us be strategic in our thinking.
	There are other responses, but the third, on which I want to focus, is that this constraint gives us an opportunity to consider future strategies in some detail. I hesitate to go so far as to say that this is the silver lining in the financial clouds, which would be rather overoptimistic, but there is the possibility of taking time for careful, calm and deliberative thought. We can be sure, for example, that no ambitious Minister will be ready to make his or her name with a promise of high-profile, short-term spending which has not been properly evidenced or evaluated, as we had before the election with suggestions around the House for spending on the long-term care of groups within the community-political stunts that did not bear discussion. We are absolved from the likelihood of that because of the financial picture within which we live. A time of financial retrenchment is a time when the backroom engine should be devoted to long-term planning and priority setting. It is not necessarily a time to say, "Let's not discuss this, we can't afford it". It is a time to think through to the future when we hope we will be in better times.
	In this spirit I warmly welcome the previous Government's pre-election proposal to create a Human Genomics Strategy Group. I know that we wanted a White Paper-it would be good to have that too-but I see the potential value of such a group. Does this proposal have the support of the coalition Government? If not, why not? Perhaps I may be optimistic. If it does, might we first work on the remit and the membership of such a strategy group? There could be a very good starting point in asking the group chaired by my noble friend Lord Patel to give advice to the Government on what such a remit should be. It is not easy and completely obvious how best we should advance on this. My view is that the remit should not simply be confined to questions of a scientific, medical and technical nature-they should be central but not exclusive. I shall supplement my own suggestions on these issues by referring to the work of Generation Scotland, whose advisory board I have the privilege of chairing. Generation Scotland has a significant presence at my noble friend Lord Patel's university, Dundee. It works in consort with the other Scottish universities with medical schools-Aberdeen, Edinburgh and Glasgow-and alongside the National Health Service for Scotland.
	The intention is to build a database, which is complementary to the UK Biobank, but different in important respects. Largely through general practices in Dundee, Aberdeen and Glasgow, so far more than 15,000 families-I stress "families"-have been recruited to this study, which amounts to more than 70,000 individuals. Through genetic screening a picture is being built up of the correlation between family genetic inheritance and the medical histories of those families. It puts on to an evidential scientific basis the information that, informally and tentatively, a GP tries to piece together by asking when your parents died and, if you know, why they died. This is a scientific approach to providing data that will correlate genetic inheritance with perceived and actual illness patterns within families. The potential benefits are huge both for knowledge and for treatment.
	So much for the example now happening in Scotland, and I draw on that, but what is its relevance to the proposed human genomic strategy group? One central conclusion I have drawn is that the oversight of such matters requires more than technical and scientific expertise. Certainly these are both central and essential, but a whole penumbra of related questions arise that may require much more than simply expertise in the scientific and technical context. They are issues of commercial exploitation-already referred to-of data sharing; of ethical principles and informed consent in relation to data sharing; and issues around the future shape of healthcare and the appropriate training and manpower needs that will arise as a result. There is a temptation to shunt all of these off to specialist committees, but it is too early to do that. A human genomic strategy group should be charged with recommendations not simply for the short term-tomorrow-but for the next decade and the decade after that. The issues of science, healthcare, commercial exploitation, ethics and regulation all bear on each other and would benefit, at least initially, from being considered in the round rather than by competing specialist committees that can easily become policy silos. In passing, I have to say that the sceptic in me does not think that there is such a thing as, for example, an ethical expert. There are experts who can aid ethical discussion, but ethics is a matter for the wider community and should not be shunted off to be considered by a separate body absent from those who know about the technology.
	That is why I believe that the human genomic strategy board, if it is set up, would have important work to do and why its remit and membership should be a matter of careful discussion and decision making. Since we cannot afford initially to commit hugely significant sums of money, we have the opportunity for thoughtfulness through this mechanism. I look forward to the Government's response to this suggestion.

The Lord Bishop of Newcastle: My Lords, I, too, am pleased to have the chance to contribute to this debate and I want to thank the noble Lord, Lord Patel, and his colleagues for the excellent work set out in this report. I am pleased to be here not only because of the importance of the rapid advances in genomic medicine in recent years, but also because it enables me to pay tribute to some of the groundbreaking work that is being undertaken in my home city of Newcastle upon Tyne at the university, in the Centre for Life and in our NHS hospitals.
	The links between genetic make-up and the diseases that afflict us are clearly established and I for one, as a non-specialist, am becoming much more aware of the possibilities that advances in molecular genetics seem to offer for the understanding, prevention and treatment of a wide range of complex diseases. I am aware of the advances that are being made so rapidly despite the very considerable complexities involved. I am also aware of Professor Sir John Burn and his work in identifying people with the gene that causes an inherited form of colorectal cancer, and of the clinical trials to test aspirin and a form of starch as inhibitors of the disease. That opens up the possibility of using simple food additives to prevent the development of that particular type of cancer.
	Another area of research in Newcastle has been into a degenerative brain disease which it was previously assumed was a form of Parkinson's or Huntingdon's disease. Only by studying in great detail the individual genetic make-up of a large family was it possible to determine the cause of the disease and identify the genetic markers for it. Other research at the Centre for Life in Newcastle has involved the use of highly sophisticated genetic analyses of a large number of families to identify how genetic variability between individuals contributes to the risk of developing cardiovascular disease both in childhood and adulthood. None of those would have been possible without the DNA technologies that have been developed in the past 20 years, and I cannot help but wonder what the next 20 years will bring.
	The advances in our understanding have been little short of extraordinary in the first years of this century, and rightly these advances have given rise to much excitement and enthusiasm. But they also give rise to a number of important issues which are addressed in this helpful report, so I will make a few points about some of the recommendations. First, I turn to the recommendation that the Office for the Strategic Coordination of Health Research should be tasked to,
	"take the lead in developing a strategic vision for genomic medicine in the UK with a view to ensuring the effective translation of basic and clinical genomic research into clinical practice".
	That is a really good recommendation, but in the current climate of the culling of quangos, it is necessary to ensure that this body or any other is adequately funded for that purpose. Money spent on getting the strategic vision right is likely to save many times that amount in both waste and application in the absence of such a strategy.
	The report also recognises the variety of stakeholders and institutions that are already active in the field of genomic research. It is essential for the public good that we,
	"should identify the barriers to collaborative working between academia and the pharmaceutical and biotechnology industries"-
	and the NHS-
	"and ways of removing them".
	The first part of that task will be much more easily achieved than the second, but barriers to collaboration will have to be overcome. The recommendations that identify the changes required to incorporate genomic medicine into mainstream NHS are good, but they, too, inevitably will require an increase in personnel and resources if we are to obtain the best possible outcomes.
	For genomic medicine to achieve optimum effect, it is important that a large database is established which is reflective of the population of the United Kingdom. Individuals agreeing to their genetic information being stored and used for research purposes must, of course, give their informed consent. Since, however, the potential uses to which their genetic information may be put are impossible to identify, unless the consent agreement is restricted to immediate and specific research, that raises a number of key questions. How informed is an individual's consent if he or she does not know how the information is to be used? Is it right to ask for broad or blanket consent unless the individual is aware of the range of possible research projects? For example, information may be used to help research into cancer treatment, but it may also be used to aid antenatal diagnosis of disease that may provide the basis for an abortion. While some people may not have a problem with this, others most certainly will. And yet, at the same time, to restrict consent to certain types of research programmes may be overly prescriptive and impractical to police. We need a fuller debate in this area.
	The report goes on to suggest that it is not necessary to introduce legislation to ban genetic discrimination. I remain to be convinced about this because if discrimination is rightly banned on the grounds of race, gender, disability or sexual orientation, then why not here? It would be possible for an employer to seek genetic information on current or future employees and then to make employment decisions based on that information. Can that be right? For people who have, for example, the gene for familial colorectal cancer or a gene which contributes to the likelihood of developing cardiovascular disease, this could lead to employers not wanting to employ-or certainly not wanting to invest in the training of-people who have those genes. Each of the genes would give a different risk of developing the disease and, in one case, there is a lifestyle contributory factor too. Would an employer be able to distinguish between some of the subtleties and the nuances? Surely it is too complex an area not to regulate through legislation.
	Similarly, the recommendation that companies supplying direct-to-consumer tests should self-regulate rather than be subject to statutory regulation is highly questionable. Self-regulation has already been found wanting in other areas of public life; what leads us to think that commercial companies would be any good at it here? The potential for misinformation is too great to be left to companies, whose main aim, after all, is to make a profit.
	When the first draft of the human genome was published in 2000, President Clinton described it as,
	"the most wondrous map ever produced by mankind",
	and Prime Minister Tony Blair hailed it as a,
	"revolution in medical science whose implications far surpass even the discovery of antibiotics".
	While of course, as we have heard, some genetic sequencing still remains to be completed, the past 10 years suggest that Clinton and Blair were not overengaging in hype. That is why I welcome the report. Although I am not sure about all the recommendations within it, it is an important step as we embark on the next stage of the exciting developments in genomic medicine.

Baroness Finlay of Llandaff: My Lords, I was fortunate enough to be co-opted on to the inquiry and it has been a great privilege to work alongside so many people from a scientific background, many of whom sit on our Cross Benches. I congratulate my noble friend Lord Patel on his chairing of the committee and on his splendid introduction today.
	I wish to speak about stratified or personalised medicine, the area of genomic medicine predicted to hold great potential for healthcare in the near term. It entails matching treatments to specific patients using clinical biomarkers to target treatments effectively by taking account of patient susceptibility to particular drugs or to adverse drug reactions. The Royal College of Pathologists told us that it anticipates that DNA and RNA-based diagnostic approaches,
	"will guide more appropriate treatment and avoid ineffective treatment, and will identify some patients who do not need treatment. [They] will be an absolute requirement before the administration of many new treatments, especially new anti-cancer drugs; [and] will increasingly allow the prior prediction of severe adverse [drug] reactions".
	However, doing the test is not enough; it is the clinical context that is crucial. Therefore any thoughts that over-the-counter tests could move things out of the clinical arena are misplaced. Tests can be misleading at best-but they can be worse than that if they are not conducted in a proper clinical context.
	My noble friend Lord Patel has already spoken about the cancer treatments that have emerged indicating a likelihood of a response to drugs, particularly Herceptin and Iressa in breast and lung cancer respectively. It is worth noting that such testing has increased about threefold in the past two years.
	However, there are problems surrounding, in general, the translation of research on pharmacogenetic tests into applications. At present there is little incentive for the pharmaceutical industry to develop the genomic tests because the business model relies on the consumption of a product-a rather blockbuster approach-to ensure a return on the substantial R&D investment which is needed to bring a drug to the market. However, stratified medicine targets a much smaller patient group and requires the development of accompanying tests, and these tests must be developed in parallel with the therapy itself.
	Professor Sir John Bell suggested that,
	"the delivery of a new set of genetic tools into the clinic has proved really difficult".
	One reason for this was that diagnostic companies could not be relied on,
	"to do what is done in therapeutics, which is to demonstrate clinical utility".
	This was because,
	"the cost of a clinical utility programme is such that, at the prices paid for diagnostics, they would never get the money back".
	We therefore recommended flexible pricing models for therapies that rely on the use of pharmacogenetic tests, the protection of intellectual property and the concurrent development and authorisation processes for therapies and diagnostic tests that will assess the clinical utility and validity of genetic and genomic tests within the NHS.
	The previous Government's response stated that the Department of Health had commissioned NICE to develop and manage a single evaluation pathway specifically for diagnostic technologies, with a pilot scheme due to report this summer. A new committee within NICE should ensure health technology assessments look at the clinical utility and validity of diagnostic tests. Can the Minister assure us that these developments are still on course? Can he clarify how the proposed value-based pricing system will allow targeted treatments to be more available, even if at a local level commissioning decisions do not support the necessary infrastructure? There may be a potential tension here between central promises and local sovereignty in decision-making.
	This is particularly important when evaluating diagnostic tests. These are inherently more complex to evaluate and yet the funds for doing so are relatively trivial. Commissioners do not know when to invest in expensive testing equipment if its utility and validity has not been assessed, and so silo budgeting acts as a barrier to capital investments, leading to a postcode lottery in diagnostics. Decisions need to be made at a national strategic level, not locally, and it is essential that clinical genetics departments are supported. They should be linked and pivotal to informing studies into the whole commissioning process. Can the Minister confirm that the Department for Business, Innovation and Skills is working with the Department of Health to ensure that intellectual property systems and management of intellectual property rights support diagnostic test development, evaluation and rollout as we recommended?
	The research community is collaborating to realise the potential of the NHS for the benefit of all. The network of hospitals in the NHS is ideally placed to link with research bodies. Indeed, the funding bodies are doing just that. This year Cancer Research UK will begin to establish a network of NHS centres using similar genetic techniques to guide treatment decisions. It will be the precursor to treating every NHS cancer patient in a similar way, perhaps in as little as five years. However, other genetic tests have not been integrated properly into healthcare. Our committee heard of the patchiness of testing, as has already been alluded to, for conditions such as diabetes.
	There is a lack of clarity over funding streams for the use of such tests as part of treatments within non-genetic specialties, and there are inconsistencies in the ordering of such tests during consultations. As I have said, doing the test alone is not enough; it is the clinical context that is key. Genetic testing is usually in the genetics department's budget and so is not necessarily more widely available. The cost of testing is increased if the patient has to be referred to be seen in genetics rather than a treating clinician taking responsibility for the whole process. Meanwhile, genetics departments are increasingly taken up with the delineation of single gene disorders as a subset of common complex disorders, and with the co-ordination of care for those with single gene, multi-system complex disease. Genetics departments are already facing potential overload.
	To ensure better use of drugs we need a red flag system of automated warnings rolled out to ensure that appropriate tests happen routinely. This will result in a cost saving through stopping inappropriate prescribing and inappropriate testing and avoid adverse reactions.
	The area that concerns me most of all is the failure of the Human Tissue Act to promote single gene testing for single gene sudden death disorders that mean that many young lives are lost. For more than 20 years we have been able to perform gene testing in the family and make an early diagnosis in the family of a risk of sudden cardiac death. NICE recommended the testing but at a clinical level it is not readily available.
	One problem is that there is no clear definition at post-mortem of "retention" for tissue samples, so, whether or not anything is seen macroscopically, samples are not always sent for DNA testing. If the family is not integrally linked into the process, samples can fall between pathology, genetics and the coroners system, and a diagnostic opportunity for others in the family can be lost. Will the Minister assure me that we will look urgently at this matter so that all patients who die of suspected sudden cardiac death will have tissue removed post-mortem for comprehensive DNA analysis? That will be linked to genetic support. Such testing should be for multiple genes, because it will save lives.
	The UK Genetic Testing Network is meant to be undertaking a review of service provision within the NHS to inform a consistent approach for single-gene disorders and single-gene subtypes of common disorders. Does the Minister know when we can expect the Government's comprehensive assessment of this? I realise that it is difficult for a Government who have only just taken over something already in progress.
	An extension of genomic medicine is epigenetics; that is, changes in the gene expression caused by mechanisms other than a change in the underlying DNA. The molecular basis of these changes is related to the packaging proteins known collectively as chromatin. The changes are not encoded in the genome sequence so are not generally passed from generation to generation. We are seeing ever more examples of underlying genetic links, such as the link with addiction, where it seems that the serotonin and dopamine in the brain's reward systems may be linked in some people when other factors come into play with developing addictions. However, it does not mean that everybody with that piece of genetic code will necessarily become an addict.
	Understanding these developments provides a "fantastic window" on different types of common diseases, but genetic counselling and genetic support are key if we are going to use any advances appropriately. I must declare an interest: I am at Cardiff University, which has one of only two established MSc courses in genetic counselling in the UK. It is well on its way to becoming an independent discipline.
	We need to ensure that genetic testing and services are supported today to ensure that developments are used to best advantage when they appear tomorrow.

Lord Colwyn: My Lords, I, too, thank the noble Lord, Lord Patel, for his effective chairing of this committee. I thank Professor Tim Aitman for his professional guidance and acknowledge the hard work of Christine Salmon Percival, Rachel Newton, Elisa Rubio, Cathleen Schulte and Cerise Burnett-Stuart. I also congratulate the noble Lord, Lord Winston, a member of our committee, on his guest appearance on the Front Bench.
	This report has been described as a,
	"remarkable summary of the state of science and the steps that the government should take if the NHS is to make the most of genomic medicine".
	I have been almost overwhelmed by the hundreds of documents and complexity of the information, but I am proud to have been associated with this inquiry into genomic medicine.
	Ethical questions now need public discussion. I realise that any reference to "Government response" refers to the previous Administration and very much look forward to hearing my noble friend the Minister's views on behalf of the new Government.
	It seems likely that, in a few years, many babies will have their genetic code mapped at birth. One reading taken from a tiny drop of blood, as with the test for cystic fibrosis, will produce the single unit of heredity responsible for how we develop, grow, live and die. This will herald a new approach to medicine, where conditions such as diabetes and heart disease can be predicted and prevented. By examining inherited genetic variants, it is possible to identify raised risks of many conditions. Those at high risk can be screened more regularly and given advice and drugs to lower their chances of becoming ill.
	This personalised medicine signals an enormous advance, revealing who is at risk, who will respond best to particular drugs and who will suffer the side effects of various treatments. These findings could lead to, for example, a genetic test of breast cancers to help doctors choose the right treatment for an individual patient, avoiding the current trial-and-error approach that in some cases exposes patients to the toxic side effects of a cancer drug that is destined to be ineffective.
	The risks and social challenges posed by genetic tests and other health services sold direct to consumers have prompted various inquiries into personalised medicine. While DNA screens, personal MRI scans and internet advice services that bypass GPs have the potential to empower patients and encourage people to take greater responsibility for their health, they also have drawbacks. Genetic profiling services which screen DNA variations for links to disease traits are marketed as a way of identifying health risks that might be reduced by lifestyle changes or medical treatment. Companies sell products over the internet for a wide range of fees and many require no genetic counselling or medical supervision. Some tests have been criticised for delivering potentially misleading, unreliable or inconsistent results. There is not yet any evidence of real health benefits. The Select Committee made recommendations on the evaluation and regulation of genomic tests within and outside the NHS. The Government response to this, and to Peter Furness's advice that the evaluation of diagnostic tests is inherently more complex and difficult than for therapeutic interventions, is vague.
	The health service needs increasingly to involve the expertise of its laboratory scientists to turn a growing understanding of the human genome into better patient care. Training for NHS scientists should provide a broader grounding in genetics and equip scientists to be able to advise hospital doctors on which DNA tests might be appropriate and how to interpret the results. As part of this process, scientists may attend consultations between doctors and patients. They may play a key role, explaining to patients what the results are showing and working together as a team.
	There were plans to trial a pilot scheme in the West Midlands last October before consideration of a national scheme. It was designed to help the NHS adapt to the rapid advances in genetics which could change the way that medicine is practised. As noble Lords will have heard, it is predicted that it may be possible to sequence a patient's genome for £1,000 or less in the next two or three years, which may help doctors to provide care tailored to individual genetic profiles. The Select Committee believes that these developments require urgent reforms to NHS training and infrastructure.
	Last year, there were many examples of the benefits of genetic screening tests. The first baby was born who had been screened to ensure that it was free of the breast cancer gene carried by a parent. At least 8 per cent of breast cancer cases are caused by specific genetic mutations. Identifying the rogue genes, BRCA1 and BRCA2, before the onset of disease will give people the chance to lead a lifestyle that minimises the chances of disease taking hold. Women with these defective genes are seven times more likely to develop breast cancer than those without the mutations. Faulty genes are responsible for between 5 per cent and 10 per cent of the 44,000 cases of breast cancer that occur in Britain each year.
	As the noble Baroness, Lady Finlay, said, more personalised care has been promised following the discovery of a genetic signature that can determine whether breast cancer is likely to respond to common treatment. This allows doctors to predict which types of chemotherapy are most likely to benefit patients, sparing them some of the more toxic and unpleasant regimes that are unlikely to work.
	The complete genetic codes of various cancers are being mapped. This information will transform treatment of the disease and has been described as the most significant milestone in cancer research in more than a decade. It is predicted that by 2020 all cancer patients will have their tumours analysed to find the genetic defects that cause them, with the information being used to select the appropriate treatments.
	The Government agreed with the committee's recommendation that the Department of Health, via NICE, instigate a programme for the evaluation of validity, utility and cost benefits of all new genomic tests for common diseases, including pharmacogenetic tests.
	A genetic screening test could more than double the chances of pregnancy for women who undergo fertility treatment. A trial last year found that two out of three women having IVF became pregnant if their embryos were checked for abnormalities before being implanted, compared with less than one-third when the test was not used. The technique known as comparative genomic hybridisation checks chromosomes in the developing embryo and ensures that only those embryos with the best chance of becoming a healthy baby are used in fertility treatment.
	The role of genetics in insurance has emerged as a controversial issue, with the development of increasingly reliable tests for DNA mutations and variations that are linked to disease. The possibility of an ability to sequence entire genomes at a reasonable cost within a few years and the widespread use of this test could open a new personalised approach to medicine in which diseases can be predicted and prevented, but the same data could be used by insurers to raise premiums for those whose genomes suggest an increased risk of illness, which could be a disincentive for taking tests.
	The Association of British Insurers has placed a moratorium on genetic testing until 2014, with a revision due in 2011, the only exception being the Huntington's predictive test whereby companies can demand test results for life policies worth more than £500,000 and health cover above £300,000. Privacy campaigners and some scientists have called for this to be hardened into legislation along the lines of the Genetic Information Nondiscrimination Act passed by the US in 2008. One issue that the Government response did not address was the committee's recommendation that Government should negotiate with the ABI a new clause in the code of practice, moratorium and concordat on genetic testing and insurance that prevents insurers asking for the results of genetic tests which were carried out while the moratorium was in place. The committee said,
	"we accept that action needs be taken to address a concern that the "sunset clause" of the insurance moratorium may deter individuals from taking genetic tests for fear of not being able to purchase adequate insurance cover after 2014".
	Some insurers have suggested that customers who take personal DNA tests may pay lower premiums because the results encourage a healthier lifestyle and that people who take genetic screening are likely to act on the results and therefore present a much better risk profile. Insurers may reflect this in premiums regardless of whether results are disclosed.
	Currently, genetic susceptibility has reached a stage where only careful experimentation will provide the information needed to show whether testing should become part of the accepted standard of care. There is a danger of widespread testing without sufficient background information and the development of a market where products are not related to public health priorities and without benefit to the individuals and populations in greatest need.
	In conclusion, having successfully managed to cut my speech from 28 minutes to l4-and now to 10-I thank the many experts and organisations who gave evidence to this fascinating inquiry. I think that it has made a significant contribution to improved health in the future. I hope that my noble friend will be able to indicate how this can be taken forward.

Lord Warner: My Lords, I begin by saying what a privilege it was to serve on this inquiry, which was so skilfully chaired by the noble Lord, Lord Patel. We owe him a great deal of gratitude for ensuring the presence of scientific stars of a positive World Cup standard, who appeared before us to give evidence that helped to inform our report. I also look forward to the appearance of my noble friend Lord Winston on the Front Bench. I wish only that the Labour Party had thought of the idea of guest spokesmen on the Front Bench when I was a Minister. I thank Tim Aitman and wish him a happy birthday and thank all the clerks' office staff for the work that they put in.
	This was an important report for the NHS and patients. It is based on extensive evidence-gathering. As a committee, we were fully seized of the state of the public finances, and we went to some trouble not to produce a wish-list of things to please scientists and damage the Government's finances further. We have been hard-headed in the recommendations we have made, with a strong focus on things that will benefit patients. What is, however, clear is that in the world of genomic medicine things will not stand still but will change at a rapid pace whatever a UK Government do about this report. It looks as though linking therapies for identifiable individuals with common diseases is progressing very rapidly, and we cannot ignore, as the noble Lord, Lord Taverne, said, the speed of that progress.
	The UK has traditionally been a world leader in the field of genetics and we were told consistently that it has punched above its weight in genomic research. That was reflected in the 2003 White Paper that I was involved in as the responsible Health Minister. The world moves on, with many advances overseas, especially in the US and China, but the UK still has a major advantage if we choose to use it wisely-a National Health Service, with universal population coverage and health data. This provides a strong scope for population-based approaches to early diagnosis of diseases and targeted personal drug therapies. Moreover, the cost of burgeoning genetic knowledge is falling rapidly, as the noble Lord, Lord Patel, described so well.
	The pace of change presents serious challenges to government and the NHS. To be honest, I found the previous Government's response to our report disappointing and, if I may say so, in some respects slightly complacent. I note that respected bodies such as the Wellcome Trust, and others, were also disappointed in that response. Too much of it looked back to what the Government had done rather than forward to what the Government and the NHS needed to do, given the pace of change. I can see that there could be a case for setting up a Human Genomics Strategy Group, which seems to be the cornerstone of the previous Government's response, but my fear is that this will be a poorly resourced talking shop with no clear mission statement and without the authority to drive change. For me, the unwillingness to produce a new White Paper that looks ahead for five to 10 years and sets out a new agenda for genomics within an NHS context is a sign of the Department of Health's reluctance to define and drive a new agenda through a HGSG or alternative machinery. After so many years around government, I have developed an expertise in recognising bureaucratic inertia, which is what this could be interpreted as. So my first question to the Minister is whether he and his colleagues in the new Government are willing to revisit the issue of producing a forward-looking White Paper and creating a more sharply defined machinery for driving forward a new agenda in this area. That would be totally consistent with the efficiency and quality agenda for the NHS that the new Government wish to produce.
	I shall confine myself to a few specific issues on the other points in the report around the translation of this new knowledge into patient benefit. The NHS in my experience has a mixed track record in translating discoveries from the lab to the bedside. There are four of these translation aspects in the report that I have concerns about. The first is extending the remit of NICE to evaluate validity, utility and cost-benefits of genomic tests for common diseases. The noble Baroness, Lady Finlay, has spoken in more detail about this critical area. We thought that it was best to place this responsibility on an existing, respected body, and I think that that was the right thing to do. However, as a former Minister responsible for NICE, I know how many new duties have been piled upon it. Can we be confident that NICE will have the resources, including the specialised expertise, to take on this demanding new role, and when can we expect to see this new role featuring substantively in NICE's work programme?
	My second area of concern relates to pathology, on which the noble Earl, Lord Selborne, has spoken. We deliberately proposed centralising laboratory services for molecular pathology as a way of making the efficiency savings that would fund much of the new equipment that will be required and on the basis of evidence given to us, particularly in relation to Oxford from Sir John Bell.
	Amalgamation also goes with the flow of the two reports on NHS pathology services by my noble friend Lord Carter of Coles, who, if I may put it this way, I unleashed on these services when I was a Minister nearly five years ago. However, never underestimate the capacity of parts of the NHS to resist change. As the committee indicated in its report, implementation of the Carter proposals has been painfully slow, given the scale of the possible savings that the noble Earl, Lord Selborne, described. The previous Government's response on this issue was hardly galvanising, even though they sort of accepted our recommendation. Their proposal was that SHA medical directors were to lead work on pathology service redesign to bring together pathology and genetics laboratories. I certainly would not have bet the farm on this achieving change quickly in the face of longstanding resistance from many local consultant pathologists, but if SHAs are to be abolished in 2012, I would expect even less to happen between now and then.
	Will the Minister have another look at this whole area, including the Carter recommendations, and come up with a more convincing plan that is also likely to deliver substantial savings and improve services? I remind him that when I was a Minister setting up the Carter review, we were thinking then in terms of 20 per cent savings on the cost of the pathology services by consolidation and amalgamation.
	My third area of concern is commissioning, where the previous Government rejected the committee's recommendation that changes were needed in the commissioning of genetic tests because of the inconsistency across the NHS in the provision of genetic tests and genetic testing for subtypes of common diseases. The noble Lord, Lord Patel, has already referred to the risk of a postcode lottery with regard to the availability of these tests. The then Government wanted to rely on the web portal NHS evidence to inform commissioners, and on the current commissioning arrangements. The respected PHG Foundation has sided with the committee after expert workshops looked at this issue among others. In a report published last month, the foundation said that the DoH,
	"should review how NHS funding mechanisms act as a barrier to the utilisation of new tests",
	and that, in effect, these make it difficult to realise cost savings throughout the healthcare economy. Given that the new Government have in mind new approaches to commissioning, this would seem a good opportunity to revisit the concerns over the commissioning of genetic tests that others have raised. Will the Minister be prepared to do this?
	My final point relates to issue of medical bioinformatics, which is critical to success in this area, as other noble Lords have mentioned. All the evidence that we received suggested that a shortage of bioinformatics personnel and kit was likely to be one of the greatest impediments that the NHS would face in using the new genetic knowledge. I am pleased that the previous Government accepted that more secure funding for the European Bioinformatics Institute was needed. We hope that this will not be a victim of cuts. However, I have grave doubts about whether the DoH is doing enough to provide sufficient bioinformatics capability to the NHS through its Modernising Scientific Careers programme, which seems to be its process of choice. That is why we recommended the establishment of an institute of biomedical informatics. I encourage the Minister to get his colleagues to look again at this proposal, particularly drawing on the potential for savings, as a number of us have said, from consolidation in the pathology area.
	I recognise that there is a lot of detail in these questions and that the Minister may well need to take further advice. We should say to him, though, that the Science and Technology Committee-I hope-will continue to keep a beady eye on this area and progress in it.

Lord Kakkar: My Lords, I, too, congratulate my noble friend Lord Patel and members of the Science and Technology Committee on this excellent report. I was not a Member of your Lordships' House when the report was first published but I have had the opportunity to speak to my noble friend about its recommendations, and I agree with my noble friend Lord Sutherland of Houndwood that the implications of the report will be read throughout the world. It is a thorough, thoughtful and authoritative piece of work, and I am sure that many other Governments and authorities will wish to consider its recommendations as they consider an issue that will affect the provision of healthcare throughout the world.
	The advances in genomic medicine that we have heard about in this debate are profound and, as we have heard, are starting to affect clinical practice today in the management of common diseases. There is no doubt as we move forward that the research that is being undertaken in this country and in other parts of the world will start to resonate, in terms of both what is available for our patients and what our patients and the general public hear about. This will drive patient and public expectation. We have heard that genetic testing and new diagnostic strategies will be available, not only through mechanisms provided through the National Health Service and other care institutions, but, as we have heard, will be available independent of healthcare institutions and systems. This will pose a considerable challenge for medical practice. Medical practitioners will be keen to do the very best for their patients and respond to their inquiries, but they will not be able to do that if they are not trained and educated in the new science of genomic medicine.
	I shall concentrate on the issue of the recommendations in chapter 7 of the report-those related to education, training and workforce planning. If we do not get this right, many of the potential advantages and benefits that we could potentially provide to society will be lost in the medium term, and in fact there will be opportunities for misunderstanding as the available science is misunderstood and clinical practitioners are not able to respond.
	Some important areas have been identified in the report regarding the question of primary education, subsequent training and continuing professional development. With regard to undergraduate medical education, the General Medical Council, in its publication Tomorrow's Doctors, which was updated in 2009, has recognised the importance of including a requirement for the teaching of genetics in the curriculums offered by higher education institutions in the United Kingdom offering primary medical qualifications. There is no doubt that these will be adopted because the recommendations in Tomorrow's Doctors will have to be applied by 2011-12, so we can feel certain that new generations of medical students moving into the next stage of their training will have knowledge about this important new science and will therefore be ready in their subsequent training to learn how to apply it.
	We need to be certain that those training programmes both for primary and secondary care across the disciplines and sub-specialties have a requirement to ensure a core competency in the understanding of genomic medicine as it applies to that specific discipline. That has been agreed in terms of the Government's response, but we need to make certain that it is applied. The coming together of the General Medical Council and the Postgraduate Medical Education and Training Board certainly suggests an opportunity for that to happen. I hope that the noble Earl will confirm that this will remain an area of focus so that the training we provide ensures the opportunity for practitioners to be able to respond not only to knowledge currently available but knowledge that will become available in the near and medium-term future. As we have heard in this debate, so much research is taking place in this particular area that advances will come thick and fast.
	Then there is the issue of current practitioners-a very large proportion of the workforce-who were educated and undertook their training prior to the whole emergence of the field of genomic medicine. They will be seeing patients and members of the general public with the results of tests and inquiries about the implications of genetic and genomic medicine on their own health day in and day out, but they have not been trained to date. We need mechanisms for continuing professional development that ensure that as advances become available, and are being considered by our healthcare systems, they can be readily made available to practitioners so that they are able to respond to inquiries from their patients. That will be hugely important because large numbers of doctors and other healthcare professionals will be confronted with these challenges. We need to make sure that we have considered this and that we have appropriate mechanisms available to ensure that continuing professional development also provides opportunities as we go forward.
	If we do not do that, the advances that come from all the excellent research and technology that we have heard about will not be readily available to patients as soon as we would hope. That will cause anxiety and unhappiness. It will miss opportunities in terms of protecting people and providing early opportunities for diagnosis and better treatment outcomes. Therefore, I urge the Government to look at this whole area of training and education in terms of taking forward the excellent recommendations in this report.

Lord Winston: My Lords, I find myself in a slightly strange position. That is partly because I am speaking for the Opposition but when the Opposition were in Government we produced the reply to this Select Committee. As a member of that committee, I would like to say how grateful I am for the remarkable chairmanship of who I hope I can call my noble friend Lord Patel and the expertise of that committee in general. I am also grateful to Professor Aitman who is a colleague of mine at Imperial College, and to the wonderful clerks on the Select Committee.
	I hope that it is in order for me to say what a privilege it is to be speaking opposite the noble Earl, Lord Howe. I have not yet had a chance to congratulate him on his appointment as a Minister. It is only fair to tell him that on this side of the House he is greatly respected and admired at the Dispatch Box. His general approach to difficult areas of medicine has been quite remarkable.
	The noble Lord, Lord Patel, started by talking about single-gene disorders, because clearly that is one area where this kind of medicine has an immediate impact. It is worth bearing in mind that there are around 6,000 single-gene disorders. These are defects in the printing of a gene that can make for a serious, often fatal, disease, quite commonly in very young people and usually in young children. These diseases are truly frightening and when they affect families they are very serious indeed, with the exception of one or two, such as colour blindness.
	Of course, the problem is that many of those 6,000 genetic diseases have different printings in the DNA. For example, the biggest single-gene defect is one in the dystrophin gene which makes muscle, which is 2.5 million base pairs or so long. In the region that codes for the protein, there can be one of several hundred different printing defects that may give different versions of the disease, which makes genomic medicine not quite as easy as it sounds. That kind of problem is echoed constantly throughout genomics.
	One of the problems is that, very often, there are misprints or changes in printing in the 3 billion pairs of letters, hence the important plea of the noble Earl, Lord Selborne, about the need for bioinformatics. My goodness, he is right. He is spot on. Without that computer information, it will be a very difficult job to untangle many of these things. That must be a key issue for the Government to consider as urgently as possible, because we need to be collecting that data. Some of our witnesses suggested that that might be more easy than perhaps was at first suspected. Dame Janet Thornton, for example, said, in response to the noble Baroness, Lady Finlay, during one of our sessions,
	"we need somewhere in the UK which has a clear mandate to handle the biomedical records with that as their first priority".
	The idea that she could localise those kinds of services fairly simply is one that we need to look at in the health service which, it is fair to say, has been bedevilled with computer problems and difficulties with storing information in IT.
	The noble Lord, Lord Patel, said also that the response of the Government was poor. I would be inclined to agree, although as a Front-Bench spokesman-however much as a guest-I have to be careful how I handle that issue. The response was not entirely poor. To be fair, one of the concerns, as the noble Lord pointed out, is that there have been massive developments, even in the past six month. That is one reason why some of the recommendations in this report that were rather poorly responded to last year might be worth revisiting-for example, the extraordinary speed at which we can now carry out genome sequencing, whereby we can measure not only the genome itself but the state of the genome. I want to talk about that again in a minute, because the state of the genome will be the key to some aspects of genetics over the next decade.
	This is one of the most important genetic issues facing the NHS. There can be no more important subject in medicine than our genes. That is why the massive hype about the genome project was quite understandable. It was a gross exaggeration of Mike Dexter of the Wellcome Trust to say that the project was more important than the invention of the wheel, because 10 years later the wheel has not actually turned. When President Clinton talked about it in terms of our humanity, I would argue that we actually learnt more about our humanity from the 1599 copy of Hamlet, produced in London. We must have a sense of proportion, and that is very important for the Government when learning how and where they have to focus precious resources. I will come back to that.
	None the less, the genome is an extraordinary issue in medicine. It is quite different from anything else, because essentially the genome does not deal with disease, but primarily with well people. That is where the information has to come from, and that is why it is rather different from most kinds of treatment. It is also the basis for pretty well every human disease. That is a curious paradox of a sort. The genome goes beyond just disease. It includes our well-being. It includes, to some extent, our status; we have hereditary influences in our genome which affect all sorts of human aptitudes. They are important in human society, and the genome will in time no doubt contribute to that when we understand it better.
	The noble Lord, Lord Patel, mentioned the epigenome. I should like to explore that a little, because for some people it is a mysterious topic. It is extraordinary that the state of the genome-what is happening to the DNA at any one time; not the printing, which is what we measure in a sequence-is really important. Researchers are beginning to understand that it is of growing importance. For example, in this country we have an important centre at the University of Southampton. Work is continuing in other universities, at the University of Auckland in New Zealand, in Singapore and in the United States. It turns out, for example, that subtle influences on the DNA printing can decide whether or not that portion of the genome will actually work. That is what epigenetics is at least partly about.
	Let me give noble Lords just one extraordinary example. A few years ago, a massive ice storm affected the eastern part of Ontario and just beyond. As a result, literally tens of thousands of power lines went down, there was a massive power cut, many people were left in darkness for up to six weeks, they lived in freezing temperatures and the temperatures outside were often minus 20. There were women trapped in their houses for six weeks; they could not use the telephone and they could not go out to shop. The interesting issue is that Michael Meaney, from McGill University, has shown that a number of women who were between 18 and 24 weeks pregnant gave birth to children who displayed quite significant differences some years after they were born. For example, their cognitive ability was different. We do not fully understand why that should be, but it was almost certainly modulated by the hormone cortisol, which occurs in times of stress, and it is probably an epigenetic effect.
	As animal research grows, we see more examples of states which affect our well-being in all sorts of ways that are important in epigenetics. There are also other patterns of inheritance which are not just related to the DNA but involve possibly proteins, certainly micro RNAs and probably parts of the chromosome. This pattern of inheritance is difficult and we do not fully understand how generational it is-that is, over how many generations these changes may occur. The thought that you might change somebody in childhood, and that that change is then inherited by the next generation, is something that we need to concern ourselves with very carefully.
	Drug development has been mentioned by a number of speakers. The key problem for the drug companies is that to develop a new drug costs around half a billion pounds. I have a good deal of sympathy with this and do not know how the Government should handle it. It requires many years of development to screen 5,000 or 6,000 compounds to find one that is of use. We know that there are specific drugs which clearly help individual cancer victims, but at present-as I know from sad personal experience-several people with cancer have visited units in the United States to get specific genomic treatment for their cancer. It seems rather sad that our own patients cannot get this treatment.
	In other areas, the classic example is of a drug designed for asthma. Most asthma in children responds to a very common and cheap drug-salbutamol. However, some patients do not respond. It is thought that those patients can be picked out by research going on around the country in several different centres, and which might influence their chest disease. One should not forget that asthma can be a very serious disease-sometimes almost fatal in some children.
	Several people, including the noble Lord, Lord Taverne, mentioned the Human Genomics Strategy Group. Given the rapid increase in knowledge, my noble friend Lord Warner's plea for a White Paper has a lot of merit. However, if there was a strategy group, its problem would be how to focus what it does and make it absolutely pertinent. To whom would it be answerable? How do you implement the effects, the research and the evidence that it takes? This kind of problem is always a difficulty for Parliament. I know my noble friend Lady Royall said that she might have struck lucky this evening; I am not sure that she has. My noble friend Lord Warner was rather kind as well but we will gloss over that rather quickly.
	Preventive medicine, which was raised by the noble Lord, Lord Sutherland, is a key issue and almost the reason for this report. The problem is that preventive medicine in general has quite a chequered history. It has always been difficult, in practice, to find what you can prevent successfully. The noble Lord is right, but I am not certain about how we can best do that.
	The work that is going on in Newcastle is, as the right reverend Prelate said, marvellous. It is a wonderful university, doing some fantastic work. Among other things, it does something key which is mentioned in the report in some detail-that is, public engagement. The Government's response to that is less than adequate. It is not sufficient just to add Sciencewise, much as I champion it. There are all sorts of things that we should be doing in schools and universities to promote better understanding of genomics. We should make sure that research councils and possibly even charities write into their research grant applications that there is some need to present this work in a way that is accessible to the public; and that we, as scientists, listen to the public's concerns. This is equally important and something that we must continue to emphasise.
	As the noble Baroness, Lady Finlay, said, Cancer Research UK does wonderful work, but we should not leave this collection of data entirely to a charity. This poses a major problem for us. The Government must co-ordinate it; if not, we will be lost in the long term.
	The noble Lord, Lord Colwyn, who I do not think is in his place, was rather kind to me as a guest spokesman. However, I see that he is sitting on the Woolsack, which makes him even more respected. He mentioned the breast cancer gene BRCA1. That research started in my laboratory, so I am rather proud of the fact that pre-implantation diagnosis, and what followed, has been widely adopted. The problem is that it has been very difficult to get the sequencing from NHS units because of the fragmentation of the NHS. Co-ordination across the NHS in this respect is still poor. We have to be rather careful about promoting the screening of embryos in general. Although it is interesting, to impose another clinical procedure on a developing egg may not be wise and could in time cause its own epigenetic problems. That is another reason why we need more research in this area.
	I wish to make a few points to wrap up. The Government have a tremendously difficult job in this regard, as would any Government, and I do not envy them. The noble Lord, Lord Warner, referred to our implementation of MRI. I first put a rabbit in an MRI machine at Hammersmith Hospital in about 1975, before people were doing it with biological organisms, but it took some 25 years before we began to use MRI regularly with patients. However, it has been remarkably difficult until recently to get MRI scans done because of the colossal expense for the NHS. That is a massive issue. Moreover, common diseases of the genome are still very elusive. Heart disease has been mentioned, but mental illness poses another huge problem for the health service, as do degenerative disorders. Diabetes is particularly elusive in terms of its genome, but perhaps that will change. To some extent the prediction, at least, of cancer is still a problem.
	In recognising genomics, we must not forget the need to continue with genetics. Some witnesses have tried to draw a distinction and argue that we should use only the term "genetics", and the Government have commented on that. I argue that we need to recognise that some of the research that we have to do, which must involve the animal model, particularly rodents, must be protected. That is often difficult to do, given the regulatory framework. It is possible, but sometimes not easy, to get through that, but young researchers may be put off that research. It needs to be connected up with our work on genomics.
	I agree with what the noble Lord, Lord Kakkar, said. This report shows the Select Committee at its best. The committee members were clearly totally impartial, expert and willing to learn and work hard. Looking across the Chamber, I find it impossible to tell which members of the committee were hereditary Peers or what political affiliation they had, if any. We worked together as a team and showed exactly what the House of Lords is about and should be about. The report sets a good example and I am pleased to think that it might have influence outside this country.
	Although we as doctors want to chase diagnoses, we must not forget that what the patient needs is treatment. There is a risk in all this of relying simply on the laboratory. We have to remember that the key skill for a doctor is less and less evident in the modern health service-the need to continue to listen to our patients.

Earl Howe: My Lords, I join other noble Lords in thanking the noble Lord, Lord Patel, for his excellent introduction to this debate, which was of particularly high quality and which was crowned by the coruscating contribution that we have just heard from the noble Lord, Lord Winston. It provides the new Government with the chance to hear, first hand, your Lordships' views on this important area of science-one that offers so much potential to improve the health of our nation, as we have heard.
	The United Kingdom has a well deserved worldwide reputation for its work in the field of genetics-the study of individual genes-and now genomics, which is the study of the interaction between genes: if genomics is like a garden, genetics is like a single plant. It is now more than half a century since Watson and Crick published their research on the double helix, while this year marks the 10th anniversary of the human genome project. The sequencing of the human genome has not only revolutionised the way in which we view ourselves as human beings, but it has led to many practical benefits, including new medicines and diagnostic tools. Throughout, British scientists have been at the forefront of this groundbreaking technology. It is a technology that increasingly brings economic benefits, as well as important improvements in healthcare.
	The inquiry by your Lordships' committee was thorough in its investigation and forthright in its conclusion, which was that this reputation, and the benefits that the science could bring, would be at risk if action were not taken to ensure that we remained at the forefront of genetic technology. The benefits are real-for patients, business and society. That is why the government response was a joint one from the Department of Health and the Department for Business, Innovation and Skills. That collaboration continues, ensuring that the UK is a place where technology and enterprise can flourish within a transparent, facilitating regulatory environment that encourages, not stifles, innovation. This includes eliminating obsolete and inefficient regulation. We want regulation to complement, not complicate, the way in which people work-not, incidentally, just in the UK but also at a European level. We will work with the EU to improve current guidelines and ensure that initiatives on research and regulation meet UK objectives.
	As your Lordships' committee rightly said, the 2003 genetics White Paper recognised the potential impact of genetics and the genome project, as well as the importance of preparing the NHS to take advantage of these developments. These were laudable aspirations, and some advances were made in the diagnosis and treatment of rare single gene disorders, yet the accompanying strategy has proved incapable of keeping pace with the speed of change in this field-a point well made by a number of noble Lords. This inability to respond to a rapidly changing landscape means, as the committee rightly concluded, that doctors, nurses and other healthcare specialists are unable fully to exploit these developments for the benefit of their patients. Clearly, this Government want NHS patients to be able to access the best medical advances that genomics will bring.
	As many noble Lords mentioned, the Human Genomics Strategy Group has already been established under the chairmanship of Professor Sir John Bell. Its remit is to develop strategic options for genomics in the NHS-that is, to work with the objective of ensuring enhanced patient services through the better use of advances in research and technology. We are fully supportive of the work of that group. The noble Lord, Lord Sutherland, made various proposals for the group's remit and I shall see that that remit and the development plan for the group are shared with the Science and Technology Committee. I will invite him to share his thoughts on both documents with the chair, Sir John Bell. He may like to know that the group had its inaugural meeting on 25 May.
	The noble Lord, Lord Taverne, asked about the funding of the group and I think that the noble Lord, Lord Warner, expressed a few fears on that front. I agree that we need to ensure that the group is properly supported. That is why we provided this support through the Department of Health, which I trust will continue.
	As the noble Lord, Lord Patel, and many other noble Lords pointed out, we are already seeing some important developments in relation to patients with diseases such as cancer and diabetes. Scientists are finding new genetic mutations that can help to define alternative treatments. We can identify patients who respond better or who suffer more severe side effects from a particular drug, helping to ensure that it is appropriately prescribed. The development of these stratified medicines has the potential to improve patient outcomes without increasing the cost to the NHS.
	In laboratories, the new DNA sequencing machines have increased capacity so that a single laboratory can sequence more data in one day than was achieved during the entire human genome project. Utilising this capacity effectively across all branches of medicine will save the NHS millions. We are linking DNA sequencing with advanced IT to diagnose children born with severe congenital problems and to help guide their treatment and care. All these achievements are opening up a new world of healthcare that can be tailored more effectively and efficiently towards individual patients.
	The Government are determined to develop a patient-led NHS that delivers better health outcomes. It is clear that genetics and genomics have an important role to play in achieving this aim. However, before moving forward, we must ensure that we are getting the most from the investment already made. Services should be commissioned by those best placed to make the decisions-doctors in consultation with patients who are free to make confident choices about their own healthcare, and better manage it as well. To make that happen we need a commissioning system that is consistent and provides appropriate services to NHS patients and their families. The UK genetic testing network is already working with specialised commissioners to determine how these services can be improved.
	While we need to ensure that the NHS benefits from advances in genomic medicine we must also make sure that existing services are fit for purpose and are accessible. As the report rightly pointed out, ensuring that NHS staff have the necessary skills to use genetic testing effectively is a vital component of providing better services. We want to see that addressed as soon as possible so that the roughly 400 types of genetic tests already available are better used by NHS staff. That is why we support the work of the GMC's Tomorrow's Doctorsprogramme, which sets out the requirements for the knowledge, skill and behaviours that undergraduate medical students should learn. It includes a requirement on medical schools to cover genetics in their curricula and provides flexibility on how best to cover its application and its place in diagnosis.
	Reducing the budget deficit is the main priority of the Government but even if that were not the case the public still have the right to expect NHS services to be provided in the most cost-effective way possible. We have a duty to identify any practice that is not providing value for money and to take action to remedy the situation. That is why the Department of Health is pushing ahead with the recommendations of the Carter review on modernising pathology services, as mentioned by the noble Lord, Lord Warner. They deliver the highest volume of genetic testing services by far. This will see the services rationalised and reconfigured to increase the quality, productivity, efficiency and effectiveness of pathology services. I say to the noble Lord, Lord Warner, that the size and importance of these services mean that we have a duty to ensure that they are as effective and efficient as possible. The Carter review estimated that the reconfiguration of services could improve quality and realise £250 million to £500 million efficiency savings annually. It is our challenge to realise that potential.
	The public have a right to hold us accountable for the way in which we invest in the NHS and to be confident that its primary focus is to improve outcomes. The Government will ensure that these principles are applied across all genetics testing services available to the NHS. The noble Lord, Lord Patel, spoke about clinical trials. Currently, the Department of Health, the MHRA and the MRC are considering what the obstacles are to the initiation and conduct of clinical trials in the UK and how these might be addressed. The MHRA is also working with European colleagues to identify any issues at a European level. The Government consult all interested parties when considering changes to legislation.
	The noble Lord also raised the issue of inconsistencies in access to the provision of genetic services. Clearly articulated commissioning competences will ensure that commissioners can incorporate new scientific developments into their commissioning decisions and deal with unacceptable variations in access to care and treatment. As the noble Lord, Lord Kakkar, rightly pointed out, one of the keys to this is education. That function is currently provided by the National Genetics Education and Development Centre based at Birmingham Women's NHS Foundation Trust. We have agreed a work programme for 2010-11 with the trust. It is agreed to target key professional groups for the programme. Future provision will be further considered through the work of the strategy group and in consultation with the trust and the centre.
	The National Genetics Education and Development Centre has already made good progress in raising the need for genetics to be part of the curricular and CIPD programmes across the medical professions, but we recognise that this conversation must be had with the royal colleges and the GMC, which are best placed to advise on curricular content for the professions that they represent.
	My noble friend Lord Selborne, whose speech on bioinformatics I listened to with close attention, asked a number of questions. It is still very unclear what type of bioinformatics will be needed for genetic testing, and what their true role will be in supporting genetic services. Work is already under way at Manchester National Genetics Reference Laboratory, and the NHS chair on pharmacogenetics based at the University of Liverpool is carrying out further research into how this new technology can best be utilised.
	The noble Lord, Lord Patel, and my noble friend Lord Selborne asked whether the Government intend to establish an institute for bioinformatics. The Government's main priority is to reduce the budget deficit and so I cannot give a commitment now on this matter. However, the Human Genomics Strategy Group will lead on giving this issue further consideration as it looks at how best we might take forward issues such as the proposed institute.
	The right reverend Prelate the Bishop of Newcastle and my noble friend Lord Colwyn referred to predictive genetic testing. My noble friend rightly said that there is a moratorium on predictive genetic test results until 2014-certainly by insurance companies. We are due to review the concordat and moratorium in 2011 and we believe that that is the right time to review the Select Committee's recommendation. We will specifically examine the question about whether a long-term agreement about the use of genetic testing for insurance purposes is appropriate.
	The noble Baroness, Lady Finlay, asked whether the Department of Health had commissioned NICE to develop and manage a single evaluation pathway specifically for diagnostic technologies. Good progress has been made. NICE's evaluation pathway programme for medical technologies and diagnostic assessment programme are already helping the NHS to adopt effective and cost-effective medical devices and diagnostics more rapidly and consistently. She asked about the role of value-based pricing and perhaps I may write to her on that. It is a matter slightly for the medium term, but I will write to her on that even though our thoughts are not yet fully worked out.
	The noble Baroness also raised the issue of BIS working with the Department of Health to ensure that the intellectual property system supports diagnostic test development. Intellectual property issues will be considered as part of the innovation sub-group of the Human Genomics Strategy Group and BIS is fully engaged with the department in taking that matter forward. She also spoke about single-gene testing for sudden cardiac death. As she knows, the taking of human tissue for any scientific or medical purposes is governed by the Human Tissue Act, which is essentially based on consent. However, I would like to provide the noble Baroness with a fuller answer and so I will take this issue away and ask my officials to supply more detailed information.
	My noble friend Lord Colwyn spoke about genetic testing kits sold to the general public and expressed his worry about that. Often, the answer proposed is that there should be some form of regulation. We have thought about that carefully, but we cannot see that compulsory regulation would be effective, given the cross-border nature of the market delivered by the internet. The Human Genetics Commission's common framework of principles provides what we see as a proportionate and effective response, given the support that it has received from the international industry and other interested parties.
	The noble Lord, Lord Warner, asked whether NICE was evaluating genomic tests for common diseases. Good progress has been made. NICE's new medical technology advisory committee has been appointed and NICE's evaluation pathway programme for medical technologies and diagnostics assessment is already helping the NHS to adopt effective and cost-effective medical devices more rapidly. The noble Lord referred to the excellent and interesting report by the PHG Foundation, a copy of which I have. We have noted that report with considerable interest. The Human Genomics Strategy Group has been asked to note the recommendations in that report as part of its work to develop a strategic vision.
	The noble Lord spoke about the commissioning of genetic testing in the NHS, which was a subject raised by several noble Lords. The UK Genetic Testing Network is part of the national specialised commissioning team in the London NHS. It currently offers more than 400 genetic tests for single gene disorders. Those are available across the NHS. It is held up as an excellent template for the evaluation and commissioning of genetic tests. It is widely admired and copied across the world.
	Several noble Lords, not least the noble Lord, Lord Patel, have put the $64,000 question to me about the possibility of a White Paper. I have to disappoint the noble Lord, because we do not believe that there is compelling evidence for a White Paper on genomic medicine at the moment. The point of a White Paper would be to address a perceived lack of strategic direction. I hope that I have shown that that is not an issue, not least because of Sir John Bell's strategy group. That is particularly true because the White Paper of 2003 was reviewed in 2008; several initiatives were refreshed, including the strengthening of specialised genetic services, building genetics into mainstream services, spreading knowledge across the NHS and generating new applications. That is clearly a matter that we will have to keep under review.
	Like your Lordships' committee, we want a future strategy for these services. That strategy must be clear, patient-led and deliver better health outcomes at a time when the national finances are in a mess. We look to Sir John Bell to provide us with that road map. We need to look at what we have already achieved and ensure that the system is delivering what the NHS needs. If not, we must be committed to making the necessary changes to make it work. Finally, we must be creative in how we deliver to ensure that we not only maintain our reputation for the science in this area but translate that science into services for NHS patients.
	It is my hope, as it is the Government's, that Members of this House, especially the noble Lord, Lord Patel, will continue to provide us with the benefit of their knowledge in this area and that they will remain at the forefront of this debate over the years ahead.

Lord Patel: My Lords, I thank the Minister for his response. I quite understand that, at this early stage in their life, the new Government are unlikely to commit to major projects. I am, of course, disappointed by the fact that they will not take some things forward but, on the other hand, I am extremely encouraged that the Minister committed himself to look at other things further or to observe their progress, particularly through the strategy board. It is encouraging that the pathology service mentioned in the report by the noble Lord, Lord Carter of Coles, will be taken forward.
	As far as information technology is concerned, I think that the Minister's advisers will be proven wrong. We know what kind of biomedical information system we require. We also know that, if we have an adequate bioinformatics system, it will regenerate information that will be helpful not only for healthcare but for developing biomarkers.
	On the whole, I thank the Minister. I know that he takes medical issues seriously and that he will do so in future. I thank all noble Lords who took part in this debate and I am gratified that so many did so. Finally, my noble friend Lord Winston should do more guest performances because he is rather good at them. I look forward to hearing him again.
	Motion agreed.

House adjourned at 9.30 pm.